Chainlink Price Eyes $20 Rally As Major Reversal Pattern Emerges
The crypto market showcased low volatility on the weekend following the neutral candle formation in Bitcoin. Most of the major altcoins including Chainlink (LINK) showed intraday sideways action in an attempt to stabilize after a weekday rally. While the consolidation has stalled the Chainlink price rally at $14.7 resistance the formation of a bullish reversal pattern hints at the potential for an impending breakout.
Chainlink Price: Falling Wedge Pattern Indicates Trend Reversal
Amid the July market recovery, the Chainlink coin managed to bottom out its prevailing correction trend at $12.2. This multi-month support intact since January 2024 has prevented the LINK holds from major correction.
Intersently, the horizontal level aligns closely with the 38.2% Fibonacci retracement level and 200W EMA, creating a high accumulation zone. A bullish turnaround from $12.2 has boasted the asset 18.45 to trade at $14.4, while the market cap jumped to $8.75 Billion.
Moreover, the Chainlink price analysis in the 4-hour chart revealed the reversal as an inverted head and shoulder formation. This chart pattern is in sign-on bottom formation with a fresh breakout opportunity once obtained after the neckline breakout.
A potential breakout from the neckline at $14.7 will accelerate the bullish momentum and may push the LINK price 12% before it faces the next major resistance.
An analysis of the daily chart shows the development of a falling wedge pattern. In theory, the wedge pattern signals the maturity of a downtrend and the opportunity to launch a counterattack. The two converging trendlines dynamic support and resistance have carried a correction trend for the past 5 months.
Thus, the potential retest to the pattern’s boundary will act as pivotal momentum for the LINK price prediction. A bullish breakout signals an initial sign of trend reversal. The post-breakout rally could drive the Chainlink price.
However, if the overhead supply pressure persists, the LINK coin price may enter another correction and tend to retest $12.2 support.
Technical Indicator:
- Exponential Moving Average: The LINK price jump above daily EMAs 20D and 50D EMA indicates the near-term trend is shifting bullish.
- Average Directional Index: The falling ADX slope at 27% indicates the prevailing bearish trend is losing its momentum.
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