LINK/USD Consolidation: When Will the Breakout Occur?
• LINK/USD is in a long-term consolidation following an abrupt selloff.
• Bulls and bears should wait for a breakout before acting.
• There are two scenarios that could play out – either a bearish flag pattern or the market carving out a bottom.
The cryptocurrency LINK provides data to smart contracts on the blockchain, and its trading pair with USD (LINK/USD) has been consolidating for more than six months following an abrupt selloff. This means that both bulls and bears must have lost their patience, but such consolidations can be interesting to trade because they usually appear ahead of another big market move.
Unlike other cryptocurrencies, LINK did not make new lower lows in the second half of 2022. Instead, buyers appeared on every attempt to trade below $6, which is a bullish accomplishment. On the flip side, every bounce was not strong enough to break the previous lower high, so bears still appear to be in control.
In 2023 there was a much-needed rally in the cryptocurrency market, with Bitcoin surging and its bullish price action translating into positive movements for other coins too. LINK/USD rallied from $6 to $8 but then met new sellers there and has since been evolving inside a horizontal channel between these two prices. Until there is a breakout from this range neither bulls nor bears can expect much action from it so they must wait patiently for one or the other before acting on their positions.
Whenever a horizontal consolidation appears on a chart, traders should look at the left side of it for trending conditions as it may be part of some pattern formation like a bearish flag pattern – which could suggest further downside movement if confirmed by price action breaking through certain levels of resistance or support accordingly. But it could also just mean that the market is carving out a bottom at these levels instead – meaning that bulls should wait for prices to break above $9.5 (ideally above $10) before going long again if they want confirmation that an uptrend is starting again soon too!
The measured move of such horizontal channels is usually equal to their widths – so traders would simply need to look for any breakout in either direction from this range and use its target size as their own measuring stick when deciding how far prices might move after breaking out from here eventually!