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Chainlink at Crossroads: Key Levels to Watch for a Breakout
The cryptocurrency market is always in a state of flux, and the recent performance of Chainlink (LINK) has left many traders uncertain about its future trajectory. As we examine the current situation, it becomes clear that LINK is at a critical crossroads, with several key levels playing a crucial role in determining the asset’s near-term price movement.
Firstly, resistance at $24.05 and $26.05 remains pivotal for Chainlink to generate a breakout and potentially surge towards $28-$30, which represents an upside of 20-40 percent from its current trading rate of $21.25. A failure to breach these levels may lead to further consolidation or even a breakdown to lower support levels around $16-$17.
The liquidation chart reveals mixed activity, with long positions dominating short ones, indicating that traders are still optimistic about the asset’s potential upside. However, this optimism is tempered by the cryptocurrency’s recent 9.12% retracement and the pressure it may exert on long positions if LINK fails to overcome its current resistance.
As we look at technical indicators, the Relative Strength Index (RSI) suggests a neutral momentum, neither overbought nor oversold. This makes the price susceptible to either an upward or downward move based on market conditions.
On the other hand, the Directional Movement Index (DMI) reveals that buying pressure remains intact, with a +DI value of 30.4 compared to the -DI value of 5.9. Nevertheless, the divergence between these two indicators warns us that buying pressure may weaken if LINK fails to breach its current resistance levels.
In conclusion, Chainlink’s current trajectory is contingent on its ability to break above $24.05 and $26.05. Should it fail, further consolidation or a breakdown to lower support levels becomes a distinct possibility. The next few days will undoubtedly be crucial in determining whether the market reverts back to bullish momentum or succumbs to further downside pressure.
Source: Coinglass
Source: cryptotale.org
