LINK is forming a cup and handle
Updated
Hello all!
With the crypto-market showing signs of recovery, I've attempted to find quality, undervalued projects that are showing strong signs of recovery. I have previously posted short-term trade ideas for QSP and NANO, but I'm also trying to find some longer-term, lower-stress trades. LINK is looking very promising as a medium-term trade. Let's look at both fundamentals and technicals.
Fundamentally, what is ChainLink? Well we all know how awesome blockchain technology is, but the main problem with blockchain tech right now is that it is extremely difficult to get data ONTO the blockchain. Real-time market data, event data, and even fiat on-ramps and bank connectivity are all currently unsupported. ChainLink looks to solve this by providing a decentralized oracle network. On top of this it will allow tokens to communicate between blockchains. REQ, for example, will be heavily dependent on ChainLink.
Now let's look at the technicals. The chart shows a pretty clear cup-and-handle pattern. The only issue with the pattern is that the "handle" is quite long. In fact, it has moved all the way to the 0.618 retracement before bouncing off it. This is a bit longer of a drop than normal cup-and-handle patterns, but a lot of this extended drop can be attributed to the bear market as well. It's also important to note the increased volume at the bottom of the cup, as well as relatively large volume on the right side of the cup. Each of these aid in confirming the pattern.
All we are waiting on at this point is an entry signal. A good entry sign would be, of course, a bullish candle on volume. Normally I would want a second confirming candle, but since we bounced off the 0.618 retracement I'm calling that the "first bull candle."
With the crypto-market showing signs of recovery, I've attempted to find quality, undervalued projects that are showing strong signs of recovery. I have previously posted short-term trade ideas for QSP and NANO, but I'm also trying to find some longer-term, lower-stress trades. LINK is looking very promising as a medium-term trade. Let's look at both fundamentals and technicals.
Fundamentally, what is ChainLink? Well we all know how awesome blockchain technology is, but the main problem with blockchain tech right now is that it is extremely difficult to get data ONTO the blockchain. Real-time market data, event data, and even fiat on-ramps and bank connectivity are all currently unsupported. ChainLink looks to solve this by providing a decentralized oracle network. On top of this it will allow tokens to communicate between blockchains. REQ, for example, will be heavily dependent on ChainLink.
Now let's look at the technicals. The chart shows a pretty clear cup-and-handle pattern. The only issue with the pattern is that the "handle" is quite long. In fact, it has moved all the way to the 0.618 retracement before bouncing off it. This is a bit longer of a drop than normal cup-and-handle patterns, but a lot of this extended drop can be attributed to the bear market as well. It's also important to note the increased volume at the bottom of the cup, as well as relatively large volume on the right side of the cup. Each of these aid in confirming the pattern.
All we are waiting on at this point is an entry signal. A good entry sign would be, of course, a bullish candle on volume. Normally I would want a second confirming candle, but since we bounced off the 0.618 retracement I'm calling that the "first bull candle."
- Basis: Cup and handle
- Entry: On bullish movement out of handle on volume
- Target 1: 9900
- Target 2: 12000
Trade active
We have broken out of the handle portion of the cup and handle on volume and are looking very bullish going forward. This is a solid entry signal.Trade active
So we've had our nice pump and consolidation out of the handle. Now would be a good time to enter if you haven't already (based on daily chart, not looking at this on any smaller timeframes).Trade active
Getting some nice consolidation here. Keep an eye on it.Trade active
Still looking good hereTrade active
This dip should have been expected and is a solid buy-in opportunity.We have retraced to the 0.618 level from our previous move, and we are forming a slightly higher high on the 3 hour chart. All positive signs, despite the recent drop.
Trade active
It appears my fibonacci level was off - I should have used the previous low. That being said, we are channeling nicely. Assuming we break this downtrend channel within the next four hours we will continue the general bull trend.Also keep an eye on BTC price. It's retracing nicely, and still no reason to panic, as its within its own channel. However, a significant drop, particularly past the $9,200 support, would signal an exit from all crypto positions in my book.
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