Chainlink (LINK) started a strong increase after it broke the $4.900 resistance area against the US Dollar. It traded to a new monthly high at $6.588 and it is currently correcting gains.
- Chainlink token price rallied significantly above the $4.900 and $5.000 resistance levels against the US dollar.
- The price traded to a new monthly high at $6.588 and it is currently correcting lower.
- There is a connecting bullish trend line forming with support at $5.900 on the 4-hours chart of the LINK/USD pair (data source from Kraken).
- The pair is currently testing the $6.000 support and it is likely to bounce back.
Chainlink (LINK) Trimming Gains
This week, chainlink token price started a strong upward move from the $4.625 swing low against the US Dollar. LINK broke a major resistance area near $4.900 and $5.000 to start a fresh rally.
There was a successful close above the $5.000 level and the 100 simple moving average (4-hours). It opened the doors for more gains and the price rallied more than 25%, and outpaced other major cryptocurrencies, including bitcoin and ripple.
The upward move was such that the price spiked above $6.500 and traded to a new monthly high at $6.588. Recently, it started a downside correction below the $6.500 and $6.400 levels.
It broke the 23.6% Fib retracement level of the recent rally from the $4.625 swing low to $6.588 high. On the downside, the $6.000 level is currently acting as a support. There is also a connecting bullish trend line forming with support at $5.900 on the 4-hours chart of the LINK/USD pair.
LINK price rallies above $6.000. Source: TradingView.com
If there is a downside break below the trend line, the price could find support near the $5.600 level. It is close to the 50% Fib retracement level of the recent rally from the $4.625 swing low to $6.588 high.
On the upside, the $6.400 and $6.500 levels are important hurdles. A fresh increase above $6.500 may perhaps open the doors for a push above the $7.000 level.
$5.000 As Uptrend Support
If LINK price corrects lower below the trend line support and $5.600, it could start a major downside correction. The next support is near the $5.350 level.
The main uptrend support is near the $5.000 level (the recent breakout zone), which is likely to act as a strong buy zone in the coming days.
Technical Indicators
4-hours MACD – The MACD for LINK/USD is losing momentum in the bullish zone.
4-hours RSI (Relative Strength Index) – The RSI for LINK/USD is correcting lower and it could test 60.
Major Support Levels – $6.000, $5.900 and $5.600.
Major Resistance Levels – $6.400, $6.500 and $7.000.
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