Chainlink on the cusp of a massive rebound after dumping over 10% in a matter of hours
- Chainlink seeks a formidable anchor at $11 to plan the next recovery mission.
- The double-bottom pattern on the 4-hour chart hints at a possible rebound to $15.
Chainlink is leading the correction in the decentralized finance (DeFi) ecosystem after losing over 10% of its value since Tuesday. The token is trading at $11.7 amid an ongoing retreat. Recovery is possible if LINK confirms the likelihood of a double-bottom pattern forming on the 4-hour chart.
Meanwhile, the Relative Strength Index adds credibility to the short term bearish momentum following the dip into the oversold area. A rebound will come will into play if the RSI creates a bullish divergence. This type of divergence forms when the RSI hits a low within the oversold area followed by a series of higher lows.
The occurrence of a double-bottom pattern also hints at a tentative recovery from the dip. The pattern comes into the picture when an asset tests the same lower price level twice without breaking it. The price level comes up as a firm buyer congestion zone, thus the weight behind the anticipated rebound.
LINK/USD 4-hour chart
On the upside, resistance is anticipated at $13 (former support). Other levels likely to hinder recovery include the 200 Simple Moving Average, the 50 SMA, and the $100 SMA. The rebound from the double-bottom targets $15, a move that could pull Chainlink into a new bullish phase towards the yearly high at $20.
It is worth noting that, LINK will invalidate the uptrend if declines stretched past the expected support at $11 (double-bottom). Massive losses are likely to play out as investors rush to cash out before Chainlink dives under $10. A possibility exists for the price to refresh August’s support at $7.2.
Chainlink intraday levels
Spot rate: $11.8
Relative change: -0.3
Percentage change: -2
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