Chainlink (LINK) is still one of the best-performing cryptocurrencies over the past twelve months. As of Jan. 23, LINK has been bigger than Litecoin (LTC) and number seven with a market cap of $ 9.2 billion, after surpassing Bitcoin Cash earlier this week.
The price hike on LINK also coincided with rumors this week that Grayscale is preparing to add a product from Chainlink Trust. This news event likely helped Chainlink reach new all-time highs, again making LINK one of the top performing cryptocurrencies.
What is the most important level of support?
LINK / USDT 1-day chart. Source: TradingView
The daily chart for Chainlink shows massive volatility over the past few months, but also some nice price movements.
Every previous level of resistance was about support, whereupon the price continued to rise, almost like a textbook. That is the beautiful nature of price promotions and trading in general.
Most people have the impulse to take a position when the price goes up. But these support / resistance flips actually make the best entries. Specifically, the first support / resistance flip occurred at the $ 10 level, after which the same thing happened to the $ 13 and $ 17.30 areas.
Therefore, the $ 17.30 area and the $ 19.50 zone are the key levels to watch for potential further downside moves. This latter area is the previous all-time high in 2020 and possibly the point of the next support / resistance flip that would be bullish for more bullish move.
See possible Chainlink price spikes
LINK / USD 1-day chart. Source: TradingView
Since Chainlink is in the pricing process, it becomes difficult to define the next points of the potential top structures. However, the Fibonacci expansion tool is very useful for traders to identify these areas.
When using this indicator, the first zone is between $ 29 and $ 31, which is in line with both Fibonacci extensions. The second zone is at Fibonacci expansion 2,618 from $ 39 and the last is in the $ 42 area.
However, on the next wave of pulses, LINK’s Bitcoin (BTC) pair is likely to spike sharply. The most recent run was led by Bitcoin, while the altcoin-BTC pairs were relatively flat.
Once Bitcoin finishes its correction and slowly moves up, the likelihood of altcoins outperforming Bitcoin increases.
LINK / BTC meets large resistance zone
LINK / BTC 1-day chart. Source: TradingView
The altcoin-BTC pairs have woken up from their deep sleep in the past few weeks, but it can’t really be called the “old season” just yet. Altcoins still need to solidify and build strength for the next leg.
With Chainlink, such an accumulation is shown on the left side of the diagram. Chainlink’s price has been hovering in an accumulation zone for some time before the recent surge kicked in.
For such a big spike to occur, the price of Bitcoin needs to remain stable. Otherwise, the volatility of BTC will have an even bigger impact on the less liquid altcoins.
LINK / BTC is now facing crucial resistance. If that level fails to break up at 0.00074000 sats, retests at sats levels 0.00055000 and 0.00041000 are possible.
However, if Chainlink breaks through 0.00074000 sats, a continuation towards the next significant zone at 0.00110000 sats is likely. In the USD pair, such a surge would bring Chainlink close to the nearest Fibonacci zone at USD 39.
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