The ChainLink price has paused following Bitcoins reversal below $40,000. But does this signal the start of a correction, or can LINK continue to go higher?
ChainLink (LINK) is trading at $22.06, down $0.016 (-0.07%)
Decentralized oracle network ChainLink has performed well over the last two weeks and is currently consolidating above August 2020s, $20.79 high.
Since turning higher on the 20th of July, LINK’s market cap has increased by more than $3.5 billion to $9.6b. This ranks ChainLink as the 13th-largest cryptocurrency ahead of Solana (SOL).
Like the majority of altcoin’s, LINK’s recent turnaround follows Bitcoin’s climb to $40,000. As a result, traders will be focused on whether the number 1 ranked crypto can maintain its rally. Presently, BTC is trading at $39,900 after slipping 5% in the last 24 hours.
The big question is how dependent is the ChainLink price on BTC, and what happens to LINK if Bitcoin fades?
The daily chart shows LINK has broken out of a bearish triangle formation that had previously capped the price.
Furthermore, LINK has cleared the 50-day moving average at $18.70 and is above the horizontal resistance of the 7th of June high at $21.48.
Additionally, the Relative Strength Index is trending higher. However, its 65.22 reading is considered high and points to the price being close to overbought in the near term.
Furthermore, the 100 DMA at $26.52 and the 200 at $27.74 offer considerable resistance on the path higher. Therefore, unless BTC convincingly advances beyond $40,000, LINK may struggle to maintain the bullish trajectory.
That aside, as long as LINK remains above the 50 DMA at $18.70, the trend is higher and suggests a test of the longer-dated averages above the market. However, should the price lose the $18.70 support level, this bullish outlook becomes invalid.
The previous trend line resistance at $15.40 then becomes a logical target for the bears.