Chainlink (LINK) Price Analysis: Consolidation Zone Exit Hints the Beginning of a New Chapter

A week of price hikes, Chainlink [LINK] somewhat seemed to have entered a consolidation zone. Nonetheless, the token managed a breakout above a multi-year pattern.

After a week of price increases, Chainlink [LINK] appeared to have entered a consolidation zone to some extent. However, the token managed to break out above a multi-year pattern.

While the next few days may be relatively quiet, a push from the broader market could propel LINK to new highs.

Chainlink’s next move

AMBCrypto’s observation of the token’s daily chart revealed a significant development. A bullish symmetrical triangle pattern formed on LINK’s chart in 2021.

Since then, the token’s price has been consolidating within this pattern, only to break out a few days ago. Following this breakout, LINK’s upward momentum appeared to have stalled.

However, this could be just the beginning of a new chapter. The breakout suggested that there is a possibility for LINK to form a bullish flag pattern.

If this occurs and market conditions align, LINK may retest its ATH and reach $50 in the coming months.

Source: TradingView

A breakout above the bull flag during an altcoin season could trigger this massive rally. In fact, recent data sets suggested that the altcoin season may arrive sooner than expected.

As reported by AMBCrypto a few days ago, BTC’s dominance slipped below a critical support. Meanwhile, the altcoin season index moved up sharply, indicating that altcoins may start shining from December itself.

What’s there in the short-term?

Since expecting Chainlink to touch $50 is a long-term assumption, AMBCrypto checked some metrics to find what to expect in the short-term.

Notably, LINK’s exchange balance increased sharply, which meant that the selling pressure on it was increasing —a sign of a price correction.

Its NVT ratio also spiked, which usually indicates that an asset is overvalued, further suggesting a pullback. However, investors need not worry, as such price corrections often occur before a flag formation.

Source: Glassnode

Interestingly, while Chainlink’s metrics hinted at a price drop, its realized loss declined sharply. This development can be attributed to the token’s past price hikes, which pushed more investors to profit.

Next, we checked the token’s daily chart to look for short-term support and resistance zones. We found that at the time of writing, Chainlink was testing its support at $18.66.

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A successful test could still allow LINK to move up in the coming days.

However, a failed test could push it back to $14.9. In either case, there was a high probability of the token forming a bull flag pattern.

Source: TradingView