Chainlink has been trading in a narrow range recently, leading to lower investor interest. However, the altcoin saw a 1.5% increase in the last 24 hours, indicating a sideways movement. On the weekly chart, LINK showed an upward movement of 4%. Despite these gains, technical analysis suggests that bears still control the price movement. Both the demand and accumulation levels remain low, although buying activity on the daily chart has slightly increased. Nonetheless, sellers still dominate the market.
The decline of Bitcoin below $27,000 has led to uncertainty among altcoins, hindering them from making decisive moves in their respective charts. After a consolidation phase, a price breakout is possible. While technical outlook suggests bearish strength, there are also signs of a possible reversal. However, for LINK to initiate a price recovery, it depends on broader market strength, reflected in the decline of LINK market capitalization that reflects weak buying power.
At the time of writing, LINK’s price was at $6.78 as it tried to break its sideways trading pattern while remaining below its resistance level of $6.90. A successful break above $6.90 could possibly trigger a rally towards $7.20. On the other hand, if the price falls from its current level, it could go down to $6.30. A break of the support line of $6.30 could push the price below $6.
As long as LINK stays above the local support line at $6.60, it has the potential to continue its recovery on the chart. The volume of Chainlink traded in the previous session was positive, indicating that buyers are returning to the market.
After sustained selling pressure, LINK is now trying to attract buyers back to the market. The Relative Strength Index (RSI) is trending upwards and nearing mid-point. Currently, sellers still outnumber buyers. Furthermore, LINK is trying to trade above the 20-Simple Moving Average (SMA) line, indicating renewed demand on the market. Despite recovery attempts, sellers still dominate the overall price dynamics.
A buy signal emerged as the price and buying power of LINK were aimed at a recovery. The Moving Average Convergence Divergence (MACD), a tool that reflects price dynamics and potential trend reversals, formed a green signal bar aimed at a buy signal. This indicated the potential for a positive price movement. Additionally, the Bollinger Bands were wide and parallel, suggesting that the coin would likely try to break out of its previous consolidated price movement.