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Chainlink (LINK) Must Continue Its Rise or It Will Revert to Its Previous Low of 20 USD

January 14, 2022

Talking Points:

  • The price of LINK has dropped back into the Ichimoku Cloud, causing bulls to be concerned.
  • LINK has dropped more than 14% from its weekly high and is now trading below the weekly open.
  • The Weekly Ichimoku chart is negative, while the Point and Figure chart suggests a strong rally ahead.

On the weekly chart, LINK is having trouble breaking through a strong resistance area. On the weekly chart, failure to close above this resistance could lead to a sharp return of decline in value.

LINK Must Choose Between a Return to 20 USD or a Surge to 33 USD

Today will most likely determine LINK’s pricing behaviour and the overall trend for the rest of January. The 25 USD level on LINK’s weekly chart encompasses the 50 % Fibonacci retracement, Tenkan-Sen, and Kijun-Sen. On Sunday, bulls pushed LINK over the 25 USD mark, but it then fell below that important level during yesterday’s trading session.

Failure to stay above the 25 USD mark will almost certainly result in a drop to the Cloud’s bottom (Senkou Span A) value area of 20 USD.

LINK/USDT Weekly Ichimoku Kinko Hyo Chart:

LINK has produced a unique and highly bullish trade setup on its 0.50 USD/3-box reversal Point and Figure chart, despite the near-term bearish price action. This setup is known as a bullish shakeout pattern.

A buy stop order at 26 USD, a stop loss at 24.50 USD, and a profit goal of 34.50 USD is a potential long setup for LINK. With an indicated profit target of 33 % from the entry, this trade has a 5.67:1 reward/risk ratio. A two or three-box trailing stop would help protect any inferred profit achieved after entrance.

LINK/USDT 0.50 USD/3-box Reversal Point and Figure Chart:

Any short-term bearish bias based on weekly chart resistance would be invalidated by the long entry plan. If LINK falls to 23.50 USD, then the bullish scenario will be cancelled out.

 

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