Chainlink (LINK) has been consolidating within a crucial support zone, with the price hovering near the $10.50 mark. This level has become key, as LINK faces the challenge of maintaining its position while approaching a primary downtrend resistance.
According to Crypto Rand, the next two weeks could be pivotal in determining LINK’s short-term trajectory, as the market awaits a decisive move.
LINK’s Crucial Support
For Chainlink, the $10.50 support level has shown to be crucial in recent months. Time and again, this horizontal support line has given the price a base and stopped further drops.
The chart shared by Crypto Rand indicates that LINK is currently testing this support once again, with the price action consolidating within a lower range. This support level has held firm since late August, with LINK bouncing off it multiple times.
What will matter, though, is how the market responds to this level in the upcoming days. If the $10.50 support successfully holds, the present downward trend may reverse. If it is not held, additional downside concerns may become apparent.
Downtrend Resistance Remains a Key Barrier
The chart by Crypto Rand also shows the presence of a downtrend resistance line, which has been restraining LINK’s price movement since June. This downward trendline has served as a barrier, preventing LINK from making a sustained higher advance.
Each time the price neared this resistance, it encountered selling pressure, resulting in additional drops. As LINK continues to consolidate, downtrend resistance remains a challenge.
The next two weeks, as emphasized by Crypto Rand, are expected to be decisive as the price approaches this trendline once more.
A breakout above the downtrend resistance could signal a shift in market sentiment and potentially trigger a move towards the $12 to $13 range. Conversely, if LINK fails to break above this resistance, it may continue to face downward pressure.
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Show more +Volume and Stochastic RSI Indicators
The volume analysis on the chart suggests that the price action in LINK lacks the conviction needed for a decisive move in either direction. There have been no noticeable spikes or divergences in the trade volume, which has been comparatively steady.
This suggests that those involved in the market are waiting for a trigger that might cause a breakout or collapse.
The Stochastic RSI indicator at the bottom of the chart indicates that LINK may be in oversold area in addition to the volume analysis. Both the %K and %D lines are positioned near the lower end, which could indicate a potential short-term bounce.
However, the absence of volume during this consolidation phase suggests that any potential bounce could be limited unless accompanied by a shift in market sentiment.
Read also: Here Are 5 Reasons Why Bitcoin (BTC) Price Will Explode
Potential Scenarios for Chainlink
As Chainlink hovers near this critical juncture, several potential scenarios could unfold in the coming weeks. If the $10.50 support level holds, LINK may see a relief rally, testing the downtrend resistance around the $12 to $13 range.
A breach over this resistance level could indicate a positive turnaround, potentially leading to more gains. If LINK is unable to maintain the $10.50 support, there may be additional selling pressure.
On the other hand, more selling pressure can arise if LINK is unable to hold the $10.50 support.
Pricing may revert to $8.00 or $9.00 in the future. LINK’s future trajectory will be determined by closely observing market activity and technical levels over the next two weeks, as to Crypto Rand’s chart.
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