- Chainlink price fades to recovery from fortnight low as crypto market consolidates and technical resistance holds.
- LINK rebounds from 200-bar EMA and multiple trendline supports, backed by bullish daily DMI.
- A sustained break above $23.60 could push Chainlink toward multi-month resistance, eyeing a fresh yearly high.
- Bears should stay cautious above $18.98, even if the LINK break $22.37 immediate support.
- Short-term recovery could gain momentum on a $23.60 breakout, while the broader bullish trend holds.
Chainlink (LINK) price posts mild losses around $23.40 early Wednesday, after an upbeat performance on Tuesday. The LINK pullback traces a broader pause in the crypto market, with traders juggling with mixed sentiment and consolidation across major coins.
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Technically, Chainlink rebounds from a convergence of the 200-bar Exponential Moving Average (EMA) and a month-long ascending trendline, as well as fortnight-old rising trend line forming part of a short-term falling wedge bullish chart formation, supported by bullish signals from the Directional Movement Index (DMI) momentum indicator.
Still, trading volume eases for the second time in five days, signaling reduced momentum. Further, the Moving Average Convergence Divergence (MACD) momentum indicator flashes bearish signals on the daily chart, pointing that the immediate upside hurdle is crucial for bulls.
That said, Chainlink’s daily trading volume eases to $1.12 billion, whereas the market capitalization also fades the previous day’s rebound while easing to $15.84 billion, according to Santiment.
With this, LINK appears to be preparing for further upside its first weekly loss in three, giving bulls reason to expect further yearly gains.
Chainlink Price: Daily Chart Points To Gradual Recovery
Chainlink’s rebound from a two-week low and a fortnight-old trend line support, forming part of the falling wedge bullish chart pattern, takes clues from the upbeat DMI signals to flirt with the 21-day EMA resistance.
The DMI’s Average Directional Index (ADX, red) line hits the 28.00 mark, well above the 25.00 neutral level, supporting the LINK’s previous recovery, as the Upmove line (D+, blue) at 20.90 stays above the Downmove line (D-, orange) at 16.70, signaling weak downside momentum.
Still, a downward-sloping resistance line from August 22, close to $23.60 at the latest, can test Chainlink buyers before giving them control.
Beyond that, LINK bulls may face hurdles at $25.30 and $26.50, before confronting the broader multi-month resistance zone between $27.20 and $27.90, comprising the tops from January and August.
Should Chainlink remains firmer past $27.90, as well as cross the $28.00 threshold, they can aim for the late 2024 peak of $30.95, with the $30.00 round-figure likely acting as an intermediate hurdle.
If LINK can’t break above the $23.60 barrier and falls below the 21-day EMA at $23.37 on daily close, it could slide back to the falling wedge’s lower edge near $22.25, and then test the $22.00 round-figure support level. After that, traders will watch the rising support line from February around $20.50 for the next move.
Notably, a convergence of the 100-day EMA and a rising trend line from late June, close to $19.00, precedes the 200-day EMA support of $17.60 to act as the final defense of the LINK buyers.
Chainlink Price: Four-Hour Chart Highlights Triangle
Chainlink forms a short-term triangle on the four-hour chart, supported by the 100-bar and 200-bar EMAs. However, MACD signals remain sluggish, and the DMI looks weak, with the Downmove line (D-, orange) near the Upmove line (D+, blue) and the ADX (red) well below the 25.00 neutral level at 8.00, suggesting a continuation of the consolidation pattern.
That said, the quote’s recovery from the $22.37 support confluence, comprising the triangle’s bottom and 200-bar EMA, allows the LINK buyers to challenge the $23.60 hurdle, including the 100-bar EMA and the stated triangle’s top.
Beyond that, the late August swing high of $23.82 and the previous monthly top surrounding $27.90 may test the bulls ahead of the 50% and 61.8% Fibonacci Extension (FE) of the LINK’s August-September moves, close to $29.77 and $31.93 in that order.
Alternatively, a downside break below $22.37 could see Chainlink pause near mid-August swing lows around $21.30 before potentially opening the door for bears toward deeper levels outlined on the daily chart.
Conclusion
Despite Chainlink’s (LINK) pause to recovery moves, the key technical levels and momentum indicators, as well as optimism among the crypto traders, keep buyers hopeful.
That said, a break above $23.60 becomes necessary to direct buyers toward the multi-month resistance levels and yearly highs. Meanwhile, failure to hold the $22.37 support may trigger a short-term pullback, which is less expected.
Overall, LINK buyers remain in control, but upcoming price action will be decisive.
