- Chainlink price struggles to gain sustainable traction.
- Still, the decentralized oracles token holds above a key support level.
- LINK could avoid a steep correction if buying pressure picks up.
Two critical trendlines have defined Chainlink price action over the past two weeks. Now, LINK sits at a make-or-break point that will define its fate.
Chainlink price may provide a new buying opportunity
In theory, trading in a channel is a simple process. The idea is to buy when the price approaches the support trendline and sell when the price nears the resistance trendline.
Chainlink price is currently trading near the lower edge of an ascending channel where it has been contained since February 25. Thereby, LINK offers traders the opportunity to initiate a new long position as the 23 twelve-hour moving average adds an extra layer of strength to this support level.
If the channel’s lower boundary can hold Chainlink price, then an upswing to the upper boundary at $37 can be expected. Further continuation of the bullish impulse at this price level might lead to a breakout towards $47, which is well beyond the 1.382 extension price at $43.
It is worth noting that the channel’s midpoint needs to be watched if a rally does develop as it corresponds to price congestion going back to February 22-23.
LINK / USD 12-hour chart
Regardless of the bullish outlook, a spike in downward pressure that pushes LINK price below the $28.50 support level will signal that the trend has changed, and a new technical formation is being shaped.
Chainlink price could then dive to the critical support at $25.50 or the measured move target of $22.