Chainlink Price Reaction: Potential LINK Changes

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by Giorgi Kostiuk

2 years ago

Technical analysis indicates potential for Chainlink (LINK) price change. Ali Charts suggests a bearish scenario.

Head-and-Shoulders Pattern Formation

The analysis highlighted a head-and-shoulders pattern on the Chainlink hourly chart. The left shoulder formed as the price fluctuated in the $23.5-$27 range. The head emerged at a higher peak around $30, followed by a decline. The right shoulder occurred at a rise to $25.8, failing to surpass the head's height. The neckline, positioned around $20.5, serves as a vital support point.

Target Calculation and Price Prediction

The target for this move is calculated by measuring the distance between the head and the neckline and projecting it downward. The difference of around $9.5 suggests a potential decline from the neckline's $20.5 level to $10. This aligns with Ali's prediction of a potential drop to $14 if the pattern is confirmed. LINK is currently trading at around $22.95.

Role of Volume in Confirmation

Volume plays a crucial role in confirming the pattern formation. A breakdown below the neckline must be accompanied by increased trading volume to validate the bearish momentum. Without this volume increase, the pattern might fail, leading to a possible LINK reversal.

While the head-and-shoulders pattern is not confirmed, LINK remains at a critical juncture. Volume will be a key factor in determining further price movement.

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