- Chainlink has fallen out of its green ascending trend line.
- A break lower has not happened as the 200-day Simple Moving Average is supporting price action.
- Expect a squeeze against the green ascending trend line below and a pop of 5% in the coming days.
Chainlink (LINK) has had a choppy ride higher of late with the favorable tailwind in cryptocurrencies helping the mood and stamina. LINK has had more worries, however, in its run-up to $28.50. On August 18, LINK fell out of character by breaking the monthly R1 resistance level and the green ascending trend line. Price action broke below $26 and looked heavy. Buyers stepped in and supported the price with a bounce off the August 1 level around $24.56.
Chainlink’s pop will be a quick grab and snatch before sellers try to break the trend again
As the rally kicked back into gear after August 18, the R1 monthly resistance level showed it was turned into support on August 20 with a perfect bounce off the level at $26.53. Sellers tried to retake control the next day, and LINK even traded below the green ascending trend line for most of the day on August 22. Again the monthly R1 resistance showed its importance by supporting price action. Buyers stepped in and pushed the price again up toward the green ascending trend line.
LINK/USD daily chart
Currently, the 200-day Simple Moving Average (SMA) is forming support for the price action LINK is showing today. As the lows are getting higher for a third consecutive day, expect buyers to push price action against the green ascending trend line. A break higher could cause a pop and hit $30.21. That level has been tested already twice, but no real close above as of yet. That level also aligns with the R2 monthly resistance, making it a double cap on price action.
Should sentiment sour or the rally fade to the downside, expect a break of the monthly R1 resistance level and the next support to be found around $24.56.
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