Disclaimer: The results of the following analysis are the author’s sole opinion and should not be considered investment advice.
Chainlink (LINK)’s recent inverse head-and-shoulders breakout resulted in the alt breaking above the EMA ribbon for the first time in over two months.
Although the long-term trend remains bearish, LINK bulls have finally shaken off a string of bullish engulfing candlesticks.
But is this enough to reverse the trend? A careful study of technical as well as market sentiment analysis can help us determine this.
At press time, LINK is trading at $9.2, up 8.33% over the past 24 hours.
LINK daily chart
After falling to a fresh 22-month low on May 12, the selling pressure has finally eased over the past few days. After a three-week consolidation near the $6.5 area, an inverse head-and-shoulders pattern finally turned in bulls’ favor.
Additionally, this gave LINK enough firepower to overturn two-month-old trendline resistance and turn it into immediate support. Hence, the supertrend turns to the green zone after a few weeks.
Considering the recent bullish hammer candlestick, a sustained recovery above the 55 EMA could pave the way for further recovery ahead. The bulls are aiming for the $10-11 range after closing above the EMA ribbon.
Any reversal from the 55 EMA could result in a pullback towards immediate trendline support while the recovery is delayed.
The RSI showed a strong recovery after breaking out of equilibrium. Despite the recent gains, it has yet to reach overbought levels. Therefore, the bulls are still likely to win in the short-term rally.
The MACD line (blue) has seen solid and consistent growth over the past few weeks. A close above the zero mark would confirm strong bullish momentum. However, CMF’s reversal from its long-term resistance could delay near-term recovery prospects.
Given the multiple signs in favor of buyers, any close above the EMA band would pave the way for an eventual test of the 61.8% Fibonacci level. Any reversal due to threats along the CMF could delay this renaissance phase.
Additionally, overall market sentiment analysis is crucial to complement technical factors for profitable moves.
Source of information: Compiled from AMBCRYPTO by 0x Information.The copyright belongs to the author and may not be reproduced without permission