Chainlink (LINK) was among a subset of cryptocurrencies that made a lower low on daily timeframes recently. A lower low is indicative of a continued downtrend and weakness at support.
However, on higher timeframes, technical tell a very different story — one of possible strength building. In fact, a signal has appeared that the last time around prompted a 14,000% rally in LINKUSD.
High Timeframe Bullish Confluence Hints At Surprise Chainlink Recovery
Chainlink (LINKUSD) remains down more than 80% from its former all-time highs. Worse yet, after a full year at bear market lows, the range broke down temporarily forming a lower low on daily charts.
In technical analysis, higher timeframes provide more dominant signals. And although there was a lower low made on the daily, the monthly timeframe did not make a lower low on a closing basis.
On top of being a possible range deviation and reclaim, the monthly candlestick formed a dragonfly doji. A dragonfly doji In Japanese candlestick analysis represents a possible bullish reversal pattern.
Within even lower timeframes, Chainlink was among a slew of altcoins they formed a different bullish Japanese candlesticks reversal pattern on weekly timeframes, called the morning star pattern.
A LINK To The Past: Oversold Stochastic No More
If bullish range reclaim on low timeframes, and a pair of higher timeframe Japanese candlestick reversal patterns aren’t enough confluence for you, there’s more.
The one-month Stochastic has left oversold territory for the first time since late 2021. The indicator spent all of 2022 oversold, and halfway through 2023.
Prior to that, the last time Chainlink left oversold conditions was back in early 2019, before going on an over 14,000% run. The signal is back and in alignment with the potential reversal patterns from above.
Meanwhile, Bitcoin and other cryptocurrencies have enjoyed much more of a recovery by comparison. The broader trend turning around more clearly could remove whatever doubt is remaining surrounding LINK, allowing the altcoin to return to its former glory days.
This chart originally appeared in Issue #10 of CoinChartist (VIP). Sign up for a free subscription.
