The Chainlink (LINK) price has been retracing since November 11, when it reached a new yearly high.
After the drop, LINK created a higher low on November 22. Is this the beginning of another upward movement?
Chainlink Increase Hits Roadblock
The technical analysis from the weekly timeframe shows that the LINK price broke out from a more than 500-day horizontal resistance area in October.
The LINK price increase was swift, leading to four successive bullish weekly candlesticks, culminating with a new yearly high of $16.60 two weeks ago. This was an increase of 130% in four weeks.
The positive trend ended last week when LINK created the first bearish weekly candlestick since the breakout.
LINK/USDT Weekly Chart. Source: TradingView
Market traders use the RSI as a momentum indicator to identify overbought or oversold conditions and to decide whether to accumulate or sell an asset.
Readings above 50 and an upward trend indicate that bulls still have an advantage, whereas readings below 50 suggest the opposite.
The RSI is increasing and above 50, both signs of a positive trend. However, the indicator is also deep in overbought territory.
What Are Analysts Saying?
Cryptocurrency traders and analysts on X are bullish.
Mr.Ape believes the LINK price will increase because of both technical and fundamental reasons. He stated that:
> Excitement for V0.2 launch & staking > More utilities with prior migration & 5 layers. > Can flip $16 this week to get into price discovery $20 and more is inevitable in $LINK with Marines on!
LINK/USDT Four-Hour Chart. Source: X
Bitcoin Scoop noted that the liquidity is building below the price instead of above it, which could catalyze an upward movement.
Finally, Tony Bitcoin charted a descending wedge pattern, and he suggested the breakout above it will trigger a sharp upward movement.
It is also worth noting that the priority migration for Chainlink staking v0.2 will be on November 28.
LINK Price Prediction – Is $20 Next?
The daily timeframe technical analysis gives a bullish outlook because of the Elliott Wave count and RSI readings.
Utilizing the Elliott Wave theory, technical analysts examine long-term price patterns and investor psychology that recur to determine the direction of a trend.
A closer look at the count shows that LINK began a five-wave upward movement (black) in June. In it, wave three extended, having 2.61 times the length of wave one.
If the count is correct, the LINK price is in wave four, which is corrective. Wave four usually takes the shape of a triangle, so LINK may consolidate above 0.382 Fib retracement support level at $12.50 (white) before beginning another upward movement.
The daily RSI supports this possibility, since it has generated hidden bullish divergence (green line), a sign of trend continuation.
A potential target for the top of wave five is 33% above the current price, at the long-term $19.50 resistance. A breakout from the triangle pattern would confirm this.
LINK/USDT Daily Chart. Source: TradingView
Despite this bullish LINK price prediction, a decrease below the 0.382 Fib retracement support level at $12.50 can trigger a 30% drop to the 0.618 Fib support at $10.
For BeInCrypto’s latest crypto market analysis, click here.
