Chainlink (LINK) price has generated a long-term bullish reversal signal. A breakout from the short-term resistance line could accelerate the rate of increase.
LINK is the native token of the Chainlink network. It connects smart contracts with each other through a decentralized oracle network. The network is supported by node operators, data providers, and smart contract developers.
Chainlink price has declined since its all-time high of $53 in May 2021. So far in June 2022 it has reached a low of $5.30.
Since then, Chainlink price made several unsuccessful attempts (red mark) to break out of the $9 resistance area. Despite the rejection, LINK price never broke below its June low.
A very interesting development is the bullish divergence on the weekly RSI (green line). The divergence is happening for the first time in Chainlink’s price history.
This catalysed an upward move towards the $9 resistance area and suggests that the price could be bullish in the future.
If Chainlink retests the $9 area and breaks out of the descending resistance line, it will confirm that the trend is bullish.
Will Chainlink be successfully broken?
The six-hour chart supports the continuation of the uptrend.
While Chainlink price is following a descending resistance line, it is currently making its fourth attempt to break. Since the lines get weaker each time they touch, an eventual breakout is to be expected.
Besides, the six-hours RSI broke above its descending resistance line, something that often precedes price increases.
The resistance line coincides with the 0.382 Fib retracement resistance level. If the link successfully breaks down, the last resistance area before the high of $9.40 will be $7.50. It is formed by a horizontal resistance zone and the 0.5 Fib retracement resistance level. Therefore, a breakout above it could quickly take Chainlink to $9.
On the other hand, a failure to break above could lead to a decline towards the November low of $6.
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