Top performing altcoin Chainlink (LINK) took a massive hit a couple of weeks ago, erasing all of its early 2020 gains in pretty much an instant. However, since the big drop, LINK has been holding some critical levels pretty well; and now, some strength is showing on its charts.
We start on a 3-day LINK/Bitcoin chart, to get the lay of the land. We can see that while the horizontal support band that was formed in 2019 has almost been taken out, the similar semi-horizontal trendline is holding very well and perfectly caught the selloff.
If price can be held here indefinitely and form a base of support, we can be fairly confident that Chainlink will be able to weather whatever comes in 2020.
Coming down to the 12-hour view of the same chart, we can see a nice progression of bull divergences on the RSI as price finds lower lows. The histogram is also maintaining a presence on the positive side of the indicator, although we are not yet seeing an accelerating bullish contraction.
Buyers are clearly stepping into the breach of these converging support zones, and it seems like we may start seeing higher price lows soon; which may transform into an uptrend of some degree.
Finally, on a 3-day LINK/Dollar chart, we see that even though LINK was decimated during the recent market collapse(s), it has been able to stay mostly above the previous consolidation structure. This large, sideways triangle consolidation has served as general support during the dramatic last week, and though price has carved deep through it, candle closes above daily timeframe have close above it.
It doesn’t seem like the Chainlink market is going to let this level go. Normally, such a chart might suggest more downside and a likely loss of this zone; but these events are extremely unusual and include a full ‘Black Swan’ event (an unpredictable event), and thus we must give the chart a bit more leeway.
We should keep watching the LINK/Bitcoin chart closely, as we might soon find an uptrend forming there.
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