Over the last three weeks, Chainlink (LINK) has formed a range between £6.23 and £5.1. The range’s midpoint is £5.62, and it has served as both support and resistance for the coin when trading inside it.
Furthermore, at £5.30, there is a horizontal support level that the market has respected. LINK has seen a sharp drop below the mid-range mark at £5.62 in recent hours of trading, retesting it as resistance.
As a result, if LINK hits the range lows and begins to reverse, the range may provide buyers with an opportunity to enter a trade.
The RSI hasn’t stayed above or below the neutral 50 line in the last three weeks, indicating that there isn’t a strong trend driving LINK. The DMI, -DI, and ADX lines have all been hovering around the 20 mark, indicating a lack of trend.
The importance of the 39-40 area on the H4 RSI was also there. If it falls below this level, it will be a sign of strong bearish momentum, possibly indicating a slide to the range lows of £5.1. Meanwhile, the RSI established a bullish divergence the coin retested the range lows on May 25. This could happen again on shorter periods, providing an opportunity to enter a long position.
The H1 chart highlights the range and the rejection LINK encountered in the middle of the range.
The lower timeframe also showed that when the price fell below £5.71, the bullish market structure shifted to bearish. The uptrend from the range lows has been broken, and a return to the range lows could be a good buying opportunity. A retest, on the other hand, demands caution.
Appearance of a morning star or an H4 bullish engulfing candlestick and other early signs of a reversal can be looked for. Bullish divergences can also increase the likelihood of an upward rise.
The OBV, like the price, was stuck in a range, highlighting the balance between buyers and sellers.
The CMF has has remained below -0.05 for a long time. This indicated that there was a modest edge to selling pressure.
To bolster the chances of a reversal upwards, the OBV would have to stay inside the area. The £5.3-£4.95 zone could help evaluate an entry into a long position. Bitcoin ending a session below £22.3k on the H4 chart could wreck this structure. Profit can be taken at the range highs of £6.13-£6.25, and the £5.62 mid-range.