Bitcoin (BTC) encountered near-term resistance neat the $49,400 mark. The bellwether coin has also dealt with selling pressure at this level several times in December. That latest Bitcoin surge from the $45.5K lows had Chainlink climbing as well.
While writing this blog, LINK wavered at $20.57 after a surge from $18.16. After that, Chainlink bulls faced hurdles while undergoing a test.
LINK Hourly Chart
The one-hour chart shows the break past descending trend-line, and the retest encountered a cemented wall at the supply area between $20 and $20.85. The rejection had LINK dropping to $18.15, testing for demand. LINK rebounded to the $20 value area again as Chainlink attracted buyers.
The altcoin has never breached this mark since the initial rejection on the 13th, though it printed higher lows since then. Trading volume stays steady, and the hammer candle pattern some hours ago indicated bulls from the woods with momentum and might lead to an upward breakout.
Reasoning
The 21 Simple Moving Average supports the alternative coin. That is according to the price chart. Moreover, there is a hammer formation, exploring whether the near-term rally has buyers backing it. The 21-SMA remained beyond the 55 Simple Moving Average, showing bullish power.
The Relative Strength Index also maintained beyond the neutral mark (50) and accentuated the bullish motion. Though the RSI formed a bearish divergence soon, it reset, and the upward move might continue.
The OBV displayed higher lows alongside price within the past few days, marking two resistance levels. OBV moving beyond these levels would strengthen the idea of buyers being strong.
Final Thought
Lower timeframes momentum switched bullishly, and buying strength seems to back the rally. Past the $20 value area, the $22 mark remained significant as far as higher timeframes are concerned. With that, sellers might join the bandwagon at this mark. Hence, LINK retest beyond the $20 area will provide a ‘buy’ opportunity, aiming at $22 and a test of $23.22 local highs.
LINK might collect steam for higher rallies if such an action develops in the coming days. That will mean exploring the resistance at $25. However, that might rely on price actions in the overall market.
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