Chainlink Analysis: Key Patterns and Downside Risks 2024.12.29
Hello, this is Greedy All-Day.
Today’s analysis focuses on Chainlink (LINK).
Weekly Chart Analysis
Looking at the weekly chart, Chainlink recently broke above the long-term resistance trendline in the green box, pushing past the previous resistance level at $21.
However, the price has now entered a corrective phase, potentially retesting the trendline.
Chainlink has dropped approximately 30% from its 2024 high.
Daily Chart Analysis
On the daily chart, the short-term ascending trendline was broken some time ago. After a retest, the price appears to have resumed its corrective trend.
A key concern here is the development of a Head & Shoulders (H&S) pattern, with the neckline break being the final confirmation for further downside.
Neckline and Entry Considerations
The H&S neckline is marked with the green trendline.
For conservative entries, I recommend waiting for the price to fall below the 60 EMA on the daily chart before entering.
Targets:
The first target is the demand zone in the blue box, specifically at the $16 level.
If $16 breaks, it would signal the end of the bullish phase, with further downside likely.
The H&S pattern target suggests a potential drop to $9.
Volume Analysis
The volume supports the completion of the H&S pattern, showing a gradual decline in buying pressure.
This weakening buying momentum increases the probability of further declines if the neckline is broken.
Conclusion
Chainlink has shown strength in breaking the long-term resistance trendline, but the recent corrective phase raises concerns:
Weakening buying pressure during the decline suggests the potential for further downside.
If the current level fails to hold, Chainlink may enter the Ichimoku Cloud, signaling a trend reversal and opening the door for a 50% decline from current levels.
Recommendation:
For now, I recommend observing the market rather than taking new long positions. Waiting for confirmation of support or a significant breakout is the safer approach.
Let’s trade smart and stay ahead of the market. 🚀
Today’s analysis focuses on Chainlink (LINK).
Weekly Chart Analysis
Looking at the weekly chart, Chainlink recently broke above the long-term resistance trendline in the green box, pushing past the previous resistance level at $21.
However, the price has now entered a corrective phase, potentially retesting the trendline.
Chainlink has dropped approximately 30% from its 2024 high.
Daily Chart Analysis
On the daily chart, the short-term ascending trendline was broken some time ago. After a retest, the price appears to have resumed its corrective trend.
A key concern here is the development of a Head & Shoulders (H&S) pattern, with the neckline break being the final confirmation for further downside.
Neckline and Entry Considerations
The H&S neckline is marked with the green trendline.
For conservative entries, I recommend waiting for the price to fall below the 60 EMA on the daily chart before entering.
Targets:
The first target is the demand zone in the blue box, specifically at the $16 level.
If $16 breaks, it would signal the end of the bullish phase, with further downside likely.
The H&S pattern target suggests a potential drop to $9.
Volume Analysis
The volume supports the completion of the H&S pattern, showing a gradual decline in buying pressure.
This weakening buying momentum increases the probability of further declines if the neckline is broken.
Conclusion
Chainlink has shown strength in breaking the long-term resistance trendline, but the recent corrective phase raises concerns:
Weakening buying pressure during the decline suggests the potential for further downside.
If the current level fails to hold, Chainlink may enter the Ichimoku Cloud, signaling a trend reversal and opening the door for a 50% decline from current levels.
Recommendation:
For now, I recommend observing the market rather than taking new long positions. Waiting for confirmation of support or a significant breakout is the safer approach.
Let’s trade smart and stay ahead of the market. 🚀
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.
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.