The stock indices are celebrating at the start of the week. Indeed, the fact that the BOE and RBA (the central bank of England and Australia respectively) have taken less restrictive actions on their monetary policy would suggest that the FED could soon emulate them. Except that the latter has for a long time been primarily concerned about what is happening in the United States.
Besides, the US Federal Reserve never responded as policy (Federal Funds) rates were lower than Core PCE inflation. So much so that we wonder about the solidity of the current recovery.
Proof, cryptocurrencies not enjoying much of the recent bullish momentum. Because precisely, Let’s not forget that they suffer from the absence of ample central bank liquidity. Especially as some of them struggle to recover from the last wave of correction last spring.
And it is currently the case of the Chainlink token, LINK which vegetates in a tidy or horizontal channel since mid-June. But an exit from this pattern would tell us more about whether its bear market continues or not. Hence the expectation of new catalysts which could appear at one point or another.
Chainlink – A range between $6 and $9 since mid-June
Since mid-June, LINK prices are moving in a well-defined range between the support at $6 and the resistance at $9. Even better, they are approaching the descending line and the 30-week moving average (MM30 weekly). To the point that we could envision the beginning of the end of Weinstein’s Phase 4, and therefore a possible neutralization of his bear market since his last ATH in May 2021.
In this sense, the technical indicators continue to move towards their respective folding lines in weekly units. That said, this price stability follows a significant downward move that dashed hopes of a favorable trend reversal. It is therefore tidy would indicate a pause in downward pressure rather than a resumption of control by buyers.
At least if this configuration were to persist for a few weeks, the output would promise to sparkle. This is what we will see by analyzing the daily chart by defining the scenarios that would occur one way or the other.
Chainlink – An exit from the area that will undoubtedly deal damage
In daily units we see a tidy quite extensive that could herald a large-scale move in the event of an exit. For now, The Chainlink token has been hovering below the $8 intermediate resistance since mid-September. But at the same time MACD and RSI are trying to stay on the right side of the barrier.
This favorable technical signal from the technical indicators would keep the hope of LINK prices returning to the highs again. tidy to $9. And suddenly they would come back in contact with the 200-day moving average (MM200 daily) and the descending line. Assuming a top-down exit, we would potentially end Weinstein’s Phase 4. On the absolute condition that prices raise the $14 resistance.
But between the lines it would be necessary to break the $18 resistance on the upside to erase the hard memory of the correction wave last spring from memory. So we could start again on a solid basis in terms of structural trend.
Otherwise, breaking the $6 support would send LINK to new lows for the year. In this sense, the sellers would project towards the $3.5 target. And if the market context were to experience excessive stress, we would fear a capitulation of the buyers. With prices falling towards March 2020 levels around $1.5.
LINK – End of Bear Market Nearing?
Many investors believe that the cryptocurrency bear market has lasted long enough. Under the pretext that the bad news would be largely integrated into the courses. The idea of hoping that the FED would yield to the sirens of a slight decrease in its monetary tightening could bring a breath of fresh air to this risky asset class has toasted since November 2021.
This would pave the way for a neutralization of its bear market. As such, the Chainlink token would pull out of its upward range. However, it would take a huge percentage of gains to offset all the accumulated losses since May 2021. And the least we can say at this point would be to forget about the prospect of another bull run.
Because precisely, the trend in the dollar index (DXY) remains bullish whether we like it or not. Although we’re seeing consolidation from last year’s highs, Weinstein’s Phase 2 remains firmly entrenched. Therefore, let us not naively think that the worst of the LINK or cryptocurrencies in a broad sense is behind us. Hence the possible danger of false technical and fundamental buy signals, which would actually contribute to the extension of the bear market.
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