Chainlink (LINK) is approaching a support level of around $18, a key zone that could determine the token’s next movement. LINK has seen a notable pullback after reaching approximately $26 in early Feb. 2023.
This retracement has led the token to retest key Fibonacci levels. These levels are now crucial in determining the direction of the price in the near term. If the price holds above this level, a bounce toward $23 or even $26 could happen.
However, Fibonacci retracement levels have been instrumental in analyzing Chainlink’s current price action. The 0.618 level is at $18.56, a support zone closely watched by traders. With the price hovering near this level, any significant movement below it could signal further downside risk.
Moreover, if Chainlink holds above this support, the next potential resistance levels are the 0.382 Fibonacci retracement at approximately $22.48 and the $23-$26 range, suggesting that upward momentum could take over.
Despite the pullback, Chainlink is still trading above its 50-day moving average, indicating that the broader market trend remains bullish. This is an encouraging sign for investors. It suggests that the long-term trend has not been significantly altered, even with recent corrective actions. If the price holds its ground and regains momentum above the $18 support, Chainlink may continue its upward trajectory.
Volume patterns point to active market interest
The volume data reveals a noticeable uptick in trading activity as Chainlink’s price moves toward key support levels. The 24-hour trading volume stands at $487.88 million, reflecting a 53.73% increase, signaling heightened market interest.
This surge in trading volume suggests that investors are actively engaged, and the likelihood of a reversal or a continued decline hinges on how these market participants respond to the current price action.
Chainlink (LINK) technical indicators: RSI and MACD
Chainlink’s Relative Strength Index (RSI) currently stands at 42.43, a zone that results in a neutral sentiment, i.e., an RSI of less than 50 means that the token is not overbought, while an RSI greater than 50 indicates oversold.
This neutral reading would mean Chainlink may enter another consolidation soon, and neither buyers nor sellers hold too much dominance in the market. However, it does not mean a reversal if the RSI moves closer to oversold levels (below 30), and a bounce would be possible in that case.
On the other hand, the Moving Average Convergence Divergence (MACD) indicator currently shows a negative value, with the MACD line at -0.549 and the Signal line at -0.771.
That implies that selling pressure continues to exist, but only in the short run. The MACD histogram is also in negative territory, adding to a bearish outlook. Yet, if in the future, the MACD line crosses above the Signal line, this could indicate that Chainlink is ready and will improve the ground.
