The price of Chainlink (LINK) has stalled after the token made an incredible 46% increase in the last 30 days. At press time, LINK exchanged hands at $11.30. However, Chainlink still has incredible growth potential, according to pseudonymous trader Cryptonary.
Another downturn is possible
Cryptonary, in his post on X (formerly Twitter), mentioned that LINK’s correlation with Bitcoin (BTC) may drive a correction for the token. However, the analyst also disclosed that the possible drawdown could be a good position to buy LINK.
Using the bullish pennant pattern, Cryptonary noted that $9.67 could be a good entry point if traders aim to target $13.38 and $17.74 in the mid-term.
What’s Next for $LINK | Chainlink Analysis
While Bitcoin’s performance often takes centre stage, LINK has a story of its own to tell.
Chainlink looks due for some downside. If we get this move down, it should send LINK to an area for a nice long/buy.
Technical analysis… pic.twitter.com/hfIwU7LQmW
— Cryptonary (@cryptonary) November 3, 2023
A bullish pennant pattern is formed when an upward movement pauses and consolidates between support and resistance lines. At the end of this pattern is usually a continuation of the upward movement.
LINK May Retest $11.46
From LINK’s 4-hour chart, the price has been consolidating between $10.81 and $11.46. Also, a support has appeared at $10.81 while there was a resistance around $11.28. This market structure was a confirmation of the analyst’s aforementioned opinion.
Furthermore, the Moving Average Convergence Divergence (MACD) showed that the buyers were in a contest with sellers to give LINK a specific direction. At the time of writing, the MACD was 0.016.
The reading of the indicator suggests that there could be a retest of $11.46 area. However, the surge, if allowed, might not last due to the presence of sellers. Compared to the reading two days ago, the On Balance Volume (OBV) closed lower.
LINK/USD 4-Hour Chart (Source: TradingView)
The OBV reading at 32.26 million indicates a declining volume flow. Therefore, a move in the downward direction may be likely if LINK first attempts to retest the previous high. On the derivatives end of the market, traders have dropped their initial bullish sentiment.
As of this writing, the LINK weighted funding rate was down to 0.013%. The funding rate measures market sentiment by tracking the long and short open positions. An increasing funding rate means long positions are dominant while a decreasing funding rate means shorts are dominating the market.
LINK Funding Rate (Source: Coinglass)
Therefore, LINK’s funding rate implies that traders have now become bearish on the price action. A close look at the data from derivatives information portal Coinglass showed that traders are targeting as low as $11.15 for LINK.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
