Chainlink has recently broken out of its descending channel, indicating that the asset could see a trend reversal. The token was on a downward trajectory since July 20, witnessing consecutive lower highs and lower lows. However, the token’s price spiked yesterday, breaking through its descending resistance line. Moreover, yesterday’s closing candle formed a demand zone, which is also a bullish development.
Also Read: Chainlink Registers Largest On-Chain Volume in 2023 with $350 Million
Chainlink currently faces resistance at around $7.619, with support at around $7.112. If LINK is able to close the day above $7.45, it opens the possibility of a bullish reversal. If the token is able to close above $7.4, it could test $7.70, which could prove to be a profit-making area. Moreover, if the $7.70 level is also crossed, it could face resistance around $8.45. This level was previously tested in February and may prove to be another profit-taking zone.
Could Chainlink fall lower?
Although LINK currently seems to be going through a trend reversal, things could change if it is unable to close above $7.45. In that case, the token could fall back below $7.00, and might even slip to somewhere between $6.0 to $6.2, as this range has a lot of volume. Nonetheless, LINK is currently in the area where the Fibonacci retracement predicts a reversal from.
Furthermore, LINK is also one of the most development-heavy projects out there. According to crypto analysis firm Santiment, LINK is among the top 5 most developed crypto protocols. The development of a project is a solid angle to consider as it shows the future prospects of the project. Being a highly developed protocol makes it easier for investors to be bullish.
Also Read: Chainlink Emerges as 5th Most Developed Crypto Protocol
