An analyst has pointed out how Chainlink could see its next major move after it breaks past the range of this technical analysis (TA) pattern.
Like other consolidation patterns in TA, the upper level of a Triangle is a source of resistance, while the lower one that of support. Also, a break out of either of these boundaries can signal a continuation of trend in that direction.
In the case of the current Chainlink Triangle, none of these cases fit exactly, as the trendlines are uneven. As the chart shared by Martinez shows, LINK’s Triangle lies somewhere between the Symmetrical and Ascending types.
As displayed in the above graph, the 1-week price of Chainlink bounced down from the resistance level of this Triangle earlier in the year and has since been approaching a retest of the support line.
“The range between $13 and $26 is a no-trade zone for Chainlink $LINK,” noted the analyst. $13 and $26 here naturally correspond to the levels where the lower and upper levels are roughly located right now.
“The next major move will come once price breaks out of this range,” explained Martinez. Generally, Triangle breakouts become more likely to occur the closer the price gets to the end of the pattern.
This is because the asset’s range narrows as it approaches the Triangle’s apex. The tight consolidation makes retests more probable to occur, and so, the chances of one of the levels not holding up also rise.
It now remains to be seen when Chainlink will finally break out of its consolidation channel, and whether a big move would follow.
At the time of writing, Chainlink is trading around $15, down almost 4% over the last 24 hours.
