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Chainlink (LINK) experienced an increase in bullish sentiment as it bounced off the $5 support level. Over the past week, LINK has broken through several support levels, resulting in gains of over 20%.
Although there have been no significant changes on the daily charts, the technical outlook for the altcoin has turned noticeably bullish. There has been a significant improvement in both demand and accumulation, while the overall strength of the broader market has also contributed to the rise in LINK.
The positive momentum in major altcoins, driven by Bitcoin crossing the $30,000 mark, has further added to the optimism. Sustaining this price momentum will largely depend on BTC’s continued upward move.
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While a drop in price for the link cannot be ruled out, the increased purchasing power will help arrest the loss of speed. If LINK manages to hold its nearest support level, the ongoing price rally is expected to continue as the increase in LINK’s market capitalization suggests the expectation of further bullish gains.
Chainlink Price Analysis: One Day Chart
After crossing the important psychological level of $6, LINK was priced at $6.20. The $6 mark has shown its importance as a support level and a break below it could potentially lead to a drop towards $5.
On the other hand, if LINK manages to break the overhead resistance at $6.46, it could potentially rise to $6.70, indicating a gain of over 11% in the upcoming trading sessions.
In case of a downside break from the current price, the $5.60 and $5 are the levels of support to watch. LINK has seen an increase in trading volume in the previous session, indicating an influx of buyers into the market.
technical analysis
LINK has seen a significant improvement in its buying strength in recent trading sessions. Despite the minor decline in price, the buying force on the charts remains stable.
This is shown by crossing the 60 mark of the Relative Strength Index (RSI), which is a sign of increasing demand. This suggests the possibility of profit taking in the price action.
Additionally, buyers have added to the momentum of the price in the market, forcing it above the 20-simple moving average line.
LINK’s daily chart is showing buy signals in line with rising demand. The Moving Average Convergence Divergence (MACD) indicator has displayed a long and rising green histogram, which is usually associated with buy signals. This suggests positive momentum for the altcoin.
However, it is important to note that the Chaikin Money Flow (CMF), which reflects capital inflows and outflows, has formed a downtrend. While capital inflows still exceed outflows, the rate of inflows is declining as of press time.
Featured Image from DataDrivenInvestor, Chart from Tradingview.com
