Technical Analysis

Chainlink technical analysis: $10 support holds, $22.90 in sight

Published: Oct 9, 2024

LINK has held its $10 support, with an upside potential toward $22.90 if resistance at $18.10 is broken. Explore the key price levels and market sentiment.

Disclaimer: This is not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results.

Market context

When we look at LINK on the monthly timeframe, the $8.22 price point stands out as a key level. Back in December 2020, we saw the price wick down to this level before setting off on a parabolic bull run. Since then, this area has remained significant, with prices consolidating above it for over 500 days during the 2023 and late 2022 bull market, acting as resistance.

In October of last year, we broke out from this zone, with prices swinging 170% up to $22.90 as bullish momentum returned to the market. More recently, we've seen prices return to this level on the 1st of October and the 1st of August 2024, which is quite interesting. The formation of a shooting star candlestick on the monthly suggests buying pressure is still present, similar to the pattern we saw back in 2020.

Buyers have been holding prices up at this level, creating a potential magnetization zone, but we're now seeing a strong bearish candle on the monthly timeframe.

1. Chainlink (LINK) monthly price chart showing key support at 8.22 and resistance levels at 18.10 and 22.90.

Switching to the daily timeframe

we can see that $10 has acted as key support over the last few weeks. This is interesting because, despite the bearish trendline still being respected, the price could be forming a wedge pattern. If bidders continue to hold the $10 level, this could be the area where we see a reversal and a push toward higher prices, with $18.10 being a significant target.

This level served as the sell-off point in April-March 2022 for LINK and was also tested at the end of May this year. If the price manages to break above $10 and regain momentum, a mid-term target of $22.90 is in play. However, if the price breaks down below $10, we'll look toward $8.22 as the next strong bidding area, which could provide a stronger return.

2. Chainlink (LINK) daily price chart displaying 10 support level, downtrend resistance, and potential targets at 18.10.

LINK is part of our CPRO picks, and while it's not currently something we're invested in, it's a strong contender. The fact that it has broken the April-March 2022 sell-off within its context highlights its potential for strong performance this cycle. Buyers have shown enough demand at key levels, and this sets up the opportunity for a decent move.

Playbook

Key levels

Support: $10, $8.22
Resistance: $18.10, $22.90

Trading setup

The $10 level is key for accumulation. If the price holds here and breaks above the bearish trendline, we could see a move toward $18.10, with a mid-term target of $22.90. If the price breaks down, $8.22 would be the next strong bidding zone.

Risk Management

Accumulating around $10 provides a solid risk-to-reward setup, but failure to hold this level would mean a reassessment of the position. Below $10, $8.22 would be the next level to target for bids.

Market sentiment

LINK has shown strength in reclaiming levels and remains part of our CPRO picks. The potential for a reversal at $10, combined with significant levels like $18.10 and $22.90 as targets, makes this asset one to watch closely. The bearish trendline is still in play, but the structure shows signs of a potential breakout.

Cryptonary's take

LINK is at a key point, and while we're not currently positioned in it, the potential for a strong move is clear. A hold above $10 and a push toward $18.10 could allow for a significant upside, with $22.90 as a mid-term target. As always, we're monitoring the asset for opportunities, and buyers should be aware of key levels, like $8.22 for accumulation if we see a breakdown.