Chainlink’s LINK token has had a strong start tothe week gaining over 17% in the last week alone. But according to prominent analyst Rekt Capital, this latest price action may indicate LINK is in an “accumulation range,” consolidating before making its next major move.
Accumulation After Rally
As Rekt Capital highlighted in a recent tweet, Chainlink has traded within a relatively narrow band between $14 and $17 for close to two months now. This period of consolidation started after LINK rallied aggressively for two months from September to October 2022.
Now, Rekt Capital believes this tight trading range indicates strategic accumulation, with strong hands buying up and holding LINK. As he states: “What if Chainlink has been a Re-Accumulation range at highs all this time?”
Rekt Capital shared a chart showing the consolidation forming on the 3-day candles for LINK/USD. If his thesis proves right, Chainlink could be gearing up for a breakout from this range rather soon.
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Zooming into Rekt Capital’s chart, we see $17 as the key resistance level to watch. A decisive break and hold above $17 is needed to confirm the current consolidation as a re-accumulation range before continuation higher.
In this bullish scenario, Rekt Capital’s analysis suggests LINK could then target $19 in the near-term. That would translate to roughly a 20% move from current price levels near $16.
On the other hand, failure to breach $17 resistance could open the door for a drop back towards the lower boundary around $14. And a breakdown below $14 support would paint a much more bearish picture, with Rekt Capital’s analysis pointing to $11 as the next target.
So in summary, Chainlink looks to be range-bound in the short run between $14 and $17 as it continues building energy for its next major impulse. A break in either direction from this critical re-accumulation range should set the stage for LINK’s next leg up or down. Traders will be closely watching the crucial $17 level, which could determine whether the oracle token’s bull run will resume or falter from here.
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