Chainlink Price Prediction: The good, the bad and the ugly of this LINK top reversal pattern

Chainlink price has rallied 80% over the last two months, creating a top reversal pattern.
This formation forecasts a conservative correction of 15% but could extend to 40%.
A flip of the $9.32 hurdle into a support floor will invalidate the bearish thesis for LINK.

Chainlink price shows an interesting setup that could result in a steep correction and an eventual undoing of the gains. While the former scenario is plausible, the latter is a worst-case outlook and has relatively less chance of manifesting.

Chainlink price ready to undo gains

Chainlink price created a range, extending from $5.26 to $9.32 as it crashed 43% between May 10 and May 12. This sudden collapse formed a double bottom at the range low, which triggered an 80% rally that pushed LINK to sweep the range high at $9.32.

However, this retest of the range high was the third one, giving rise to a triple tap setup. This technical formation forecasts a reversal to collect liquidity.

During the 80% upswing, LINK formed a smaller range, extending from $5.28 to $7.49, where it consolidated for quite a bit before breaking out. Therefore, the range high of this smaller range at $7.49 is the first area of interest.

A breakdown of this barrier will indicate that the worst is yet to come. In such a case, Chainlink price could make a run for the liquidity resting below the double bottom at $5.28. This move would indicate a 40% crash.

However, if Chainlink price manages to stabilize around $7.49, it would constitute a 15% retracement.

LINK/USDT 1-day chart

While things are looking bad for Chainlink price, a flip of the $9.32 hurdle into a support floor will invalidate the bearish thesis for LINK. In such a case, Chainlink price could make a 17% run for the next resistance level at $10.95.

Share: Cryptos feed

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram