Chainlink Technical Analysis: LINK Buyers Face Stiff Resistance At 20-day SMA
Daily Chainlink LINK Price Analysis
- Chainlink price crashed by $11.65 between April 16 and April 24.
- LINK has flashed a morning star pattern in the daily chart.
The Chainlink price dropped from $42.65 to $31, between April 16 to April 24. During this fall, LINK managed to reverse the 20-day SMA from support to resistance. However, the 50-day SMA has remained firm and provided robust support to LINK.
Chainlink Price Bounces Up From 50-day SMA
Over the last three days, the Chainlink price has bounced up from the 50-day SMA and flashed the morning star pattern. This upward surge has taken LINK to $34.30. The TD sequential detector has also flashed red-nine candlestick, which prompted the buyers to take control.
Image: LINK/USD daily
Chainlink price faces a major resistance barrier at the 20-day SMA ($36) over 6,000 addresses had purchased almost 12.5 million LINK tokens.
Chainlink Market Overview
Similar to many altcoins, Chainlink (LINK) saw a prominent price correction in the past week. It shed over 27% of its trading price on 22 April. However, since then, LINK was able to arrest the bearishness, stabilize the price, and start a recovery run. This led to a 14% price hike in the past few days, and the trend may continue in the coming week.
During this recovery period, one can note a fundamental change in the way the LINK market operates. Altcoins are typically correlated with Bitcoin and this has led to multiple corrections in the altcoin market recently. Interestingly, data provided by IntoTheBlock emphasized a dramatic trend reversal in LINK’s market. Over the past few days, the BTC-LINK correlation fell from 0.86 to 0.31. This could have enabled the price to trigger a recovery run, even as BTC stalls around the $50k price point.
In the case of Chainlink’s derivatives offerings, Binance continues to dominate with the highest trading volumes. Analyzing the funding rate can add greater clarity to the predominant market sentiment at the moment. The funding rate is positive for perpetual swaps at around 0.01% after having fallen from around 0.20% at the start of the month. This is still a bullish sign for LINK’s market and may substantiate the bullish momentum that may prevail in the coming week.
In the coming month, if LINK continues its recovery run, the decreasing correlation with BTC may, in turn, become an added layer of immunity against such corrections.
Chainlink Price Is Expected To Reach These Levels
The Chainlink price may ride this bullish wave and reach the 20-day SMA($36).