There you go, the inflation figures are gone and the rates of the EDF just increased by 75 bps. Thus, we are in an economic environment which is still restricted for risk-on assets such as cryptocurrencies. The ecosystem is in difficulty, but for all that, there are many projects that are maintaining an interesting pace of development while playing a crucial role. Today, discover a technical analysis on cryptocurrency LINKa major ecosystem oracle.
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LINK is back below a pivot level
Let’s use the volume profile, an indicator that helps to better understand the volumes traded on an asset. This allows us to establish relevant areas where the price will tend to react. Thus, you can see that the LINK has been moving in a range since May. Indeed, it oscillates between a lower limit at $5.52 and an upper bound at $9.67. The VAH and the VAL are levels where the price can be rejected or rebound in order to continue its evolution within the range. They are not insignificant and should be considered when using volume profile. Here the HAV is located at $7.83 and the VAL at $5.94.
Two other levels can be identified within this range:
- On the one hand there is the HVN (High Volume Node). This sits at $6.30/$6.38. It is a price zone where the volume traded is greater than the average. Thus, this is a level where the LINK has a strong chance of rebounding in the event of a return of the price here.
- On the other hand, there is POC (Point of Control) at $7.05/$7.15. This is an essential level as a profile volume user. It marks the place where the volume traded is the greatest. This is a key level where I added a pivot zone (in blue) in order to widen the intervention zone. With price moving below the POC, the probability of a return to the VAL is more crucial than a return to the VAH.
What is the bias to have on the LINK?
Now, let’s move on to a smaller time scale to determine the bias to have. In the same way as on the 3D time unit, the LINK is bearish on a daily scale. Thus, it is necessary to favor bearish objectives on this asset since the troughs and peaks are descending. Currently, the price is below its POC, the latter being in confluence with the MA100 and the set of EMA13/15/32. These are very interesting in the short term. In the case where LINK would be led to be rejected on the current level, it seems interesting to favor a fall in the price during the next few weeks.
If we wish to see a return of the price to higher levels such as $7.80, the pivot zone must be regained. For the moment, it does not seem interesting to consider more important objectives in view of the dynamics of the asset and, more generally, of the cryptocurrency market. If the asset continues to register troughs and descending peaks, a return of the price on the HVN then the VAL is to be kept in mind. Finally Yes Ethereum and Bitcoin unscrew on the downside, altcoins will follow and LINK will likely return to $5.52.
Here we are at the end of this analysis of the LINK. Pay more attention to the pivot zone, it is the central point of our range. As long as no fence exists above $7.30, it will be difficult to hope for an explosion in the price. Know that we are in a range, a technical configuration which is not the most optimal to operate on the markets if you are not a seasoned trader. Thus, it is imperative to take your precautions by having a good risk management on the markets.
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