Without a doubt, one of the best-performing cryptocurrencies in the past few years is Chainlink (LINK). In recent days, the cryptocurrency surged from $6.80 to $9.30 capping a 40% percent move and becoming the number nine cryptocurrency by market capitalization.
Can Chainlink continue moving upward and even reach the magical number of $10 or higher?
Crypto market daily performance. Source: Coin360
Chainlink rallies with 41% since the crash last weekend
As most of the cryptocurrencies saw a massive crash at the weekend, Chainlink did the same. The price of Chainlink dropped from $8.75 to $6.90, all the way toward the support level of the range it was in.
LINK/USDT 1-day chart. Source: TradingView
Since that drop, the price of Chainlink immediately bounced back heavily and tested the resistance at $8.75 again. Only this time the resistance broke down and the price rallied toward $9.60, a new all-time high.
What are the crucial levels to watch for Chainlink?
These are defined using the following chart, in which the crucial support and next target zones are shown.
LINK/USDT 4-hour chart. Source: TradingView
The crucial support level is defined by the previous resistance zone at $8.75. The market and traders want to see a support/resistance flip of this level, confirming that new buyers are stepping in.
Such a support/resistance flip would warrant further upward momentum. The next resistance and target zone is $10.40, using the Fibonacci extension tool.
If the 2.618 Fibonacci level is taken, the next resistance zone is found at the $12.50 level. When assets or cryptocurrencies are in price discovery (without any historic price data at given price levels), the Fibonacci extension tool is a great asset to identify new target zones.
However, once the support/resistance flip fails, this upward breakout above $8.75 can be classified as a fakeout. In this scenario, Chainlink goes back in the range between $7 and $9. After such a fakeout, a test of the range low would be likely,…