Chainlink has been one of the best performing major cryptocurrencies throughout 2019, incurring parabolic price action that allowed it to post fresh all-time highs this past summer. This massive momentum has slowed quite a bit over the past few weeks and months, but the cryptocurrency is still trading well off of its year-to-date lows.
It is important to note that LINK has been able to maintain above its long-term parabolic trendline, which may signal that the crypto will see further “epic gains” in the near-term.
Chainlink Holds Parabolic Trendline Despite Short-Term Downtrend
At the time of writing, Chainlink is trading down nearly 5% at its current price of $1.84, which marks a massive decline from its weekly highs of roughly $2.00.
LINK has been able to post a strong recovery from its recent lows of $1.60 that were set last week concurrently with the major downturn seen by Bitcoin when it dropped to lows of $6,400 before posting a strong recovery.
Chainlink’s price action has largely favored bulls over a larger time frame, as the crypto is trading up significantly from its from its 2019 lows of $0.20.
In the near-term it appears that LINK is at a critical resistance level that may be suppressing its near-term price action, with Scott Melker, a popular cryptocurrency analyst on Twitter, telling his followers that a failure to break above $1.94 could spark a downtrend.
“$LINK (USD) At key resistance. Break above and flip to support, or this is a relief bounce before further price depreciation,” he explained.
$LINK (USD)
At key resistance. Break above and flip to support, or this is a relief bounce before further price depreciation. pic.twitter.com/bHmhmBM5pj
— The Wolf Of All Streets (@scottmelker) December 23, 2019
Although it does appear that Chainlink was firmly rejected at this resistance level, it is important to note that its parabolic trendline is still intact.
Melker also spoke about this trendline in a tweet from earlier today, telling his followers that LINK is currently pushing up against this trendline, which means that any further downside could lead the crypto to break this bullish formation.
“$LINK / $BTC Weekly: Parabola meme still intact – barely. If this breaks, expect at least a 40-50% drawdown, although more is technically likely. Parabolic movement is epic for gains, both long and short,” he said while pointing to the chart seen below.
Parabola meme still intact – barely. If this breaks, expect at least a 40-50% drawdown, although more is technically likely. Parabolic movement is epic for gains, both long and short. pic.twitter.com/i9voDXrlOJ
— The Wolf Of All Streets (@scottmelker) December 24, 2019
How Chainlink responds to its test of this line in the near-term will offer significant insight into which direction the crypto will trend next, and it could spark another massive movement, in one direction or another.