- Chainlink seeks a formidable anchor at $11 to plan the next recovery mission.
The double-bottom pattern on the 4-hour chart hints at a possible rebound to $15.
Chainlink is leading the correction in the decentralized finance (DeFi) ecosystem after losing over 10% of its value since Tuesday. The token is trading at $11.7 amid an ongoing retreat. Recovery is possible if LINK confirms the likelihood of a double-bottom pattern forming on the 4-hour chart.
Meanwhile, the Relative Strength Index adds credibility to the short term bearish momentum following the dip into the oversold area. A rebound will come will into play if the RSI creates a bullish divergence. This type of divergence forms when the RSI hits a low within the oversold area followed by a series of higher lows.
The occurrence of a double-bottom pattern also hints at a tentative recovery from the dip. The pattern comes into the picture when an asset tests the same lower price level twice without breaking it. The price level comes up as a firm buyer congestion zone, thus the weight behind the anticipated rebound.
On the upside, resistance is anticipated at $13 (former support). Other levels likely to hinder recovery include the 200 Simple Moving Average, the 50 SMA, and the $100 SMA. The rebound from the double-bottom targets $15, a move that could pull Chainlink into a new bullish phase towards the yearly high at $20.
It is worth noting that, LINK will invalidate the uptrend if declines stretched past the expected support at $11 (double-bottom). Massive losses are likely to play out as investors rush to cash out before Chainlink dives under $10. A possibility exists for the price to refresh August’s support at $7.2.
Chainlink intraday levels
Spot rate: $11.8
Relative change: -0.3
Percentage change: -2
Trend: bearish
Volatility: High
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.