Chainlink has traded over 500 days in a tight range between $5 and $9. While it might feel as though there is no end in sight to the sideways price action in LINK, a high time frame momentum change could finally send prices out of this range ands soaring higher. Here’s why.
Chainlink On The Cusp Of Momentum Change
Chainlink is in the top 20 cryptocurrencies by market cap and among the “blue chip” coins from previous crypto market cycles. It was a stand out during the last bull run, and was a rare altcoin that kept up its bullish momentum throughout 2018 and 2019 when other crypto assets were locked in a bear market.
High time frame momentum in LINKUSD began to turn down in late 2020 long before it made a peak. Momentum indicators like the LMACD are considered lagging in nature because it takes time for momentum to change, similar to how a car takes longer to brake depending on how fast it was accelerating.
When momentum does change, it often doesn’t slow down for some time –– which is why yet another high time frame momentum change pointing back upward is so significant.
The End Of Lower Prices in LINK
According to the 4-week LINKUSD chart, the LMACD is about to cross bullish on the higher time frame. In technical analysis, higher time frame signals are more dominant than the daily or weekly, for example.
The 4-week isn’t an often used time frame in crypto trading, however, it is a slightly more sensitive version of the 1-month. By having two to three days less trading each candle than the monthly and the fact it doesn’t coincide with the calendar specifically makes the 4-week chart a unique and useful alternative.
Using the same tool on the 1-month, the LMACD is still a bit shy of making a crossover. Thus, by shaving just a couple days off each candle, the 4-week could be a prelude of what’s to come on the monthly. A bullish crossover happens when the LMACD line crosses the signal line from below.
Importantly, the 4-week LMACD remains below zero on the indicator, giving a reading of -0.03 and -0.04 on the signal line. Pushing back above zero into the positive will be required for sustained bullish momentum, but at the very least, the tool could be suggesting the bearish momentum is finally coming to an end.
from Bitcoinist.com https://ift.tt/Fp2aH9e
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