Chainlink seems to be having a dull time since it hit a peak of $20. The euphoria is all gone and now the Link marines are trying to prevent the coin from crashing further. September 23rd seems to be a local bottom, as the price of Link has since been rising higher.
On a slightly higher time frame of 4-hour, it was bullish, until the price formed a rising wedge pattern. Hence, the whole set up for Link is now bearish. In fact, the price has already broken out of this and is heading down.
Chainlink 4-hour chart
As mentioned above, the pattern formed is a bearish rising wedge pattern; since the price has already broken out and is heading down, this adds more to the already bearish setup. Important levels include the range [$7.29 to $8.73]. As obvious as it is, now would be the best time to short Link. Since an actual exit level isn’t available, the said range is provided, and Link can rest anywhere in it.
What’s more important is Link’s drop below the 0.236-Fibonacci level at $10.882. Hence, this is a confirmed bearish setup.
In addition to the above-mentioned reasons, the indicators OBV and RSI show why this is bearish for Link. The OBV indicator which represents the volume has failed to reconquer the support [inclined green line]. Now, we can see the OBV reduce slowly, showing that the buyers are losing momentum. The same can be seen with RSI.
Levels to look out for
The first level to keep an eye out for includes $9.83, anything beyond this is an easy downtrend to $8.37. Mentioned below are the levels for the short position.
Take-profit: $8.73, $
The take-profit level given above is a conservative one and the top of the mentioned range; this position can be kept open below the range with a proper trailing stop-loss to maximize profits.
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