Chainlink (LINK) Rallies 20%, But Here’s Why It Could Reverse Gains
Chainlink (LINK) recovered sharply from the $7.35 support zone against the US Dollar. The recent rally is now facing a strong resistance near the $10.00 zone and the 100 SMA (H4).
- Chainlink token price started a strong upward move from the $7.32 low against the US dollar.
- The price is now facing hurdles near the $10.00 resistance and the 100 simple moving average (4-hours).
- There was a break above a crucial bearish trend line with resistance near $9.00 on the 4-hours chart of the LINK/USD pair (data source from Kraken).
- The pair is likely to reverse gains if there is no upside break above $10.00 and $10.50.
Chainlink (LINK) is Recovering
In the past few days, there was a steady decline in chainlink (LINK) below the $10.00 support zone against the US Dollar. The price even broke the $8.50 support level and settled well below the 100 simple moving average (4-hours).
Today, bitcoin and Ethereum started a steady recovery above $10,550 and $340 respectively. LINK price also recovered sharply from the $7.32 low and it climbed nicely above the $8.50 and $9.00 resistance levels.
There was also a break above a crucial bearish trend line with resistance near $9.00 on the 4-hours chart of the LINK/USD pair. The pair broke the 23.6% Fib retracement level of the downward move from the $13.31 high to $7.32 low.
LINK price rallies to $10.00. Source: TradingView.com
However, the price is now facing a couple of important hurdles near $10.00. The 50% Fib retracement level of the downward move from the $13.31 high to $7.32 low seems to be acting as a strong resistance.
The previous support near $10.50 and $11.00 are now likely to act as a major resistance along with the 100 simple moving average (4-hours). A successful daily close above the $10.00 resistance and a follow up move above $11.00 is must for upside continuation in the near term.
Reversal From $10?
If chainlink’s price fails to clear the $10.00 resistance and stays below the 100 simple moving average (4-hours), there is a risk of a fresh decline in the near term.
An initial support on the downside is near the $9.00 level. The main support is near the $8.50 level, below which the bears are likely to aim a new monthly low below the $7.300 level in the coming days.
4-hours MACD – The MACD for LINK/USD is now gaining pace in the bullish zone.
4-hours RSI (Relative Strength Index) – The RSI for LINK/USD spiked above the 50 level.
Major Support Levels – $9.00, $8.80 and $8.50.
Major Resistance Levels – $10.00, $10.50 and $11.00.