Chainlink Crypto News: Chainlink’s 4X Rise Followed by Potential 55% Correction, Analyst Warns
Crypto News- A widely followed crypto strategist is warning that Chainlink (LINK) may be on the verge of a massive correction.
Analyst Predicts Mid-Cycle Top for LINK
Pseudonymous analyst Credible tells his 394,500 followers on the social media platform X that the native asset of the leading decentralized oracle network appears to have printed a mid-cycle top.
50-60% Drawdown Considered Healthy for LINK
According to the analyst, a deep corrective move is now in the cards for LINK after witnessing massive rallies in the last few months.
“I understand that after 10 months of up only and a 4x rally, a pullback lasting 2-3 months with a 50-60% drawdown is normal, natural and healthy,” he explained.
Elliott Wave Theory Signals Correction
Further, anything deeper than that but above the origin of the impulsive move is a higher low and technically totally fine.” The trader uses the Elliott Wave theory, which states that a bullish asset tends to witness a five-wave rise before pulling back. Looking at the trader’s chart, he seems to suggest that LINK has completed its five-wave rally and is now poised for a correction toward support at $7.26.
Current LINK Price
At time of writing, LINK is worth $16.49.
Bearish Outlook for Polygon (MATIC) as Well
Credible is also bearish on Ethereum (ETH) scaling solution Polygon (MATIC), predicting that the altcoin will fall to support at $0.585.
Shorting Opportunity in MATIC
“Hello MATIC my old friend, it’s time to short you once again. Up to 5-8% more potential upside, looking for 20% downside at minimum,” he stated.
LINK Shows Strength Amid Bullish Rebound
The token is displaying extreme strength as the bulls seem to have capitulated the rally following a bullish rebound that occurred in the last week. The volume has been consistent, indicating the growing interest of the traders in the platform. Now that the price has surpassed one of the key resistance levels, a bullish continuation is expected, which may elevate the levels beyond the desired target of $20.
Potential for Higher Targets
Is this just the beginning? Is LINK price aiming for a higher target for the monthly close?
Breaking Out of Long Consolidation
Ever since the price broke the 20-month-long consolidation, the Marines have become hopeful of the upcoming trend. Another breakout could be on the horizon, as the price has now surged above the barrier, which may attract fresh liquidity hereafter. With this, the target of $20 has become achievable, while the real targets have become more elevated beyond the yearly highs. The upper chart displays a huge bullish trajectory for the LINK price as the token has undergone a giant upswing after forming a triple bottom at the support zone close to $13. Moreover, the price has broken above the resistance of the descending triangle before reaching the apex of the pattern. Besides, the bulls did not leave any scope for a correction as the price maintained a healthy upswing and surpassed the crucial resistance at $16.42.
Bullish Sentiment Expected to Persist
Moreover, the fresh week’s trade began with a strong bullish sentiment, due to which the trade is expected to remain elevated until the end.
Price Target and Resistance Zones
The price is expected to maintain a healthy upswing until it reaches the crucial resistance zone between $18.39 and $19.18 in the next few days. After sustaining and consolidating within the resistance zone, a brief upswing to the yearly highs at $21.8. This may cause a small correction but eventually, a fresh rise could lead to a rally above $22.
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