After running for several days in a bullish uptrend, Chainlink (LINK) finally broke its parabolic run which led to a severe fall. At the time of writing, LINK trades at $13.24 between two important fib levels which may help the digital asset bounce one more time.
Bears may look like they have taken over, but bulls still have enough time to confirm further green movement on higher timeframes.
Altcoins from all sections of the crypto market are raging in a powerful new push toward newer highs as Bitcoin’s performance tumbles.
Now that the giant rests after nearly reaching an ATH of $35k, profits will start to flow into other cryptocurrencies. Chainlink appears to be one of those cryptocurrencies as it entered a bullish phase since the start of the new year.
Stalling at $11, bulls decided that they have finally had enough and that they want to see more from LINK. The parabolic run commenced on January 3, lasting for nearly 24 hours.
During that time resistances were slowly but surely pushed, respecting the parabola on each individual downturn. However, the situation turned extremely bad for bulls as bears broke the trend as of this morning.
Almost all of the gains made since the parabolic run have been erased at one point. Nevertheless, LINK still managed to bounce and is now testing a significant resistance level.
In this highly volatile zone, bulls have not that much time left to turn $13.53 into support. The area acted as resistance during the parabolic run but it was naturally broken after a few hours of consolidation.
Considering that the bullish PA stopped the first thing that optimistic investors have to do is hold the area between $13 and $13.53. LINK has already shown its strength by bouncing from the 0.786 fib line at $12.33, but can it keep bouncing?
Numerous support levels can protect Chainlink and its parabolic fall
On higher timeframes, we have at least 2 important levels that Chainlink has to respect if it wishes to stay in an uptrend. First, we have horizontal support at $11.54 which traders broke in late December.
The next and even stronger support level stands at $10.48 which was successfully retested before the latest run. Readers should note that these price levels are far away from us at the moment. Nevertheless, there may still be a chance for us to revisit these zones in the case that Bitcoin fails to hold its momentum.
Both aforementioned price zones have strong confluence with Fibonacci lines. Therefore, optimistic investors should be fearful when considering to open long positions at these levels. As a matter of fact, RSI retesting 50 again may coincide with prices retesting $11.54.
To conclude, the most important feat that bulls should achieve today is to successfully bounce at $13. This level decides Chainlink’s fate and whether it will experience a temporary correction or a long-term downward trend.
Whatever the case is, parabolas are sensitive and investors have little time left to replicate yesterday’s performance and ascend further beyond.
Doing that will not be easy though, as there are three levels of resistance between $17 and $18. Slow and steady is not the game that bulls want to play. Chainlink requires a decisive move to revisit its ATH.