At Cryptotreat, we offer regular price analyses of Chainlink (LINK) and other cryptocurrencies. Today July 12 we are beginning a new series price analyses for top cryptocurrencies including Chainlink (LINK).
If Binance’s BNB token was the star of the 2018 bear market, Chainlink (LINK) has perhaps been 2019’s star. The dataset-importing oracle project was doing fantastic even before a Google development blog name-dropped LINK in a high-level tutorial post last month.
In USD terms, the oracle token is currently up about 500% from the start of 2019, with a maximum gain of more like 900% at the extremes. And it has been one of the few altcoins performing consistently well even versus Bitcoin, compounding the USD gains.
Can this continue? We take a look at the technical indicators to try and answer this question.
Looking at the daily LINK/BTC chart, we can see the recent history of Chainlink’s impressive gains. The first two pumps since May both saw 127% gains from their bottoms, with about 40% corrections following each. The latest growth period (after the Google post), saw even more gains from the previous bottom – 165%.
As the reader can see, the present correction is well within the limits of what we have seen this year. A 42% correction has been followed, now, by some stabilization at this level.
Looking at a different LINK/BTC daily chart, we use the Fibonacci retracement tool to track the recent correction. We see that LINK has retraced, been bought up, and held precisely within the so-called “golden pocket” (or golden ratio) range.
This is a famous trading zone between the 0.65 and 0.618 range of the Fibonacci retracement scale, where inflection points can often be found. Here, this range happens to coincide with the swing zone of the previous market cycle. We can see the intense buying wicks exactly within these two ranges, indicating that buyers were lying in wait to scoop LINK up exactly at this level.
Looking at daily indicators, we see that LINK is remaining healthy during the present correction.
RSI levels are holding within the bullish side of the range, and the tops of the RSI peaks were even higher than both the previous ones – definitely a bullish sign. Both histogram and MACD peaks are much higher than previous peaks; although the present correction has also gone much deeper than the previous one. This should probably not surprise us, as LINK was getting very overheated.
Briefly looking at the weekly chart, we also see good things in general. A tweezer top pair of candles don’t give us too much cause for concern despite being potentially bearish – they have happened during LINK’s recent runup with no effect, and the small candle body on the recent close diminishes this effect.
The weekly RSI is something to watch. The most recent cycle already put in a higher high on the peak; now, this week has a chance to possibly set a higher low as well. Should this occur (with some follow-up the next week to confirm a bottom), we could be very excited about LINK. On the histogram, only a slight downtick is painted on the chart – again, some downside on the histogram is to be expected.
LINK has had an unbelievable year so far. According to the charts, there doesn’t seem to be any major indication that this needs to change. A bit of consolidation and cooling-off would be helpful. Already with a market cap of a billion dollars, Chainlink could soon be a blue chip coin.