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Trading Insights: Chainlink Latest Crypto Predictions and Price News

LINK Market Trajectory: Analyzing Today’s Price and Future Trends

LINK's Market Trajectory
Breaking Down Chainlink’s Market Movements

Chainlink (LINK) has recently garnered attention with its break from a significant trend line, as discussed in the previous update. This analysis aims to explore when a top can be confirmed for LINK and delves into its larger market picture, particularly focusing on a bullish scenario currently under exploration.

Understanding the Leading Diagonal and Wave Patterns

The primary scenario under consideration for LINK is a so-called leading diagonal, an uptrend starting with five waves. Currently, LINK is at a pivotal point, either in wave three or just finishing it. This indicates a potential turning point in the market. The support area for a potential wave four pullback is identified between $9.75 and $12.88. A successful completion of all five waves would be a strong indication of a lasting low being established. However, further confirmation is needed, which would come from a three-wave pullback forming a higher low. This pullback would be labeled as wave two following the first five waves up, identified as wave one.

The Challenges with Diagonals in Trading

Diagonals, while identifiable in trading, present certain challenges. Although tradable, it is generally advisable to avoid trading within a diagonal. Instead, focusing on larger market swings and allowing the diagonal to play out is recommended. An example of this approach is taking profits towards the end of wave three or at the end of wave five of one and then considering buying at the end of the wave two for a potential wave three rally. This strategy should always include strong risk management.

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Micro Support Areas and Fibonacci Extensions

In recent weeks, tracking micro support areas has been crucial in understanding when the pullback in wave four might begin. So far, these support levels have held up. The recent reaction to the 200% Fibonacci extension at $16.67 is a key level for a third wave extension in a diagonal. Ideal levels in such a third wave typically range between the 1:1 ratio ($9.75) and the 1.618 extension ($13.58), with anything above that being overextended – a common occurrence in the crypto market.

The Current State and Potential Pullback in Wave Four

At present, it’s too early to confirm if wave four has started. The current movement down appears corrective, with only three waves down. A five-wave down or a corrective rally forming a lower high would confirm a wave four start. The next pullback areas to watch for wave four support are $12.88, $14, and $9.75. A triangle formation is possible for wave four, but there is no current evidence to support this.

Watching for Key Break Points and Fibonacci Levels

The break below the last swing high at $16.44 is crucial to confirm the start of wave four. A rally forming a lower high in a corrective B wave, followed by a five-wave move down into the support area, would further confirm this. More precise targets can be provided once wave A and wave B are complete. A break above the last high could extend wave three to around $18.30, the next structural resistance.

Staying Cautious and Monitoring Market Movements

As LINK approaches potentially deeper pullbacks, it’s important to monitor the market closely. The deepest pullback so far indicates that wave four might be starting, but a confirmation requires the price to break below $13.24. Until then, further extensions in wave three are still possible.

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Future Projections for Chainlink

LINK is showing a bullish scenario, but a pullback is overdue, possibly taking the price down to $9.75. While the market remains bullish, traders should approach with caution and closely monitor key support levels and Fibonacci retracements. The next few days to weeks will be crucial in determining LINK’s market direction and potential entry points for investors.


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