LINK (ChainLink) Weekly Trade Follow Up.
Updated
LINKBTC has lost the gains it has made on the first half of January. We are now retesting the 4-year long trendline that has held as strong support after reversing off of the 0.236 Fib line above. We did anticipate such a move in preparation for higher highs. However, we haven't yet gotten confirmation that LINK will not break below the strong support. The current weekly candle is only one day old. Zooming in to the daily, we don't see signs of reversal either. It is crucial to see a bullish pin bar (hammer candle) before setting up for re-entry. The stop loss will be just below the 3600 Satoshi support line. Breaking that line signals that LINK is too weak to surpass the recent high of 0.236 Fib. Current market volatility makes this trade risker than usual. Therefore, lower capital should be allocated on it. The reason is that I would not be surprised if during this week, price breaks below 3600 Satoshi and rebounds back to 4500 Satoshi above the rising trendline.
Summary:
If you're not holding a position in LINK, then wait for reversal signal.
If you are holding a position, then set a generous stop loss below 3600 Satoshi and reduce your position such that the loss is manageable. You can always re-enter this trade after we see reversal. Remember that our target is at 16k Satoshi in May or July. It's better to enter with more confidence even if you waste the perfect entry.
Good luck
Note
We broke the rising trend line downwards, that has not been broken since January 2018. We are now sitting at the support line below that at 3600 Satoshi as we warned may happen. The RSI is higher than recent lows, so the RSI divergence is still ongoing. That is a good sign of reversal. However, I still maintain that breaking the major trend line shows unprecedented weakness in LINK which makes me very cautious. That line is very likely to resist the price on the next bullish momentum.
Related publications
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.