Although many altcoins hit bottoms not seen since 2017, others such as Chainlink, Tezos, and Ethereum Classic could regain their bullish trends and reach higher highs. Take a look at the technical analysis.
Chainlink
Back in early July, the TD sequential indicator predicted that Chainlink was due for a major correction based on its 1-week chart. The bearish signal (in the form of a green nine) was then validated and LINK plummeted nearly 70 percent from a high of $4.80 to a low of $1.47. After such a steep correction, this technical index is now forecasting that this cryptocurrency may be bound for an upswing.
As a matter of fact, the TD sequential indicator recently presented a red nine candlestick, which is a buy signal. This, in combination with a spinning top candlestick and a move above the 7-week moving average, represent strong evidence that LINK could soon experience a bullish impulse.
Adding to the bullishness, the 61.8 and 65 percent Fibonacci retracement zone was able to contain the price of LINK from a further decline. This Fibonacci retracement area is considered by many traders as the ‘golden’ retracement zone due to the high probability of a rebound.
Yet, Chainlink has to experience a greater buying pressure to allow it to bounce off this area. If volume indeed picks up, LINK could have the potential to reach the 50 percent Fibonacci retracement zone that sits at $2.48.
Nonetheless, an increase in selling pressure could take this crypto to break below the ‘golden’ retracement zone. This will be considered as a trend reversal from bullish to bearish with the potential to take LINK down to the 78.6 percent Fibonacci retracement level, around $1.15.
Chainlink’s 1-day chart also seems bullish when looking at the moving averages. At the moment, LINK is trying to regain the 150-day moving average as support. If successful, it could then try and test the resistance given by the 100-day moving average.
Moreover, LINK appears to have formed a double bottom pattern under this timeframe. This technical pattern develops at the end of a correction, signaling a change in trend and a momentum reversal from bearish to bullish. As a result, everything seems to point to a bullish scenario for Chainlink. Based on the indicators, LINK could experience a bullish impulse that takes it up at least 28 percent to test the 100-day moving average and the 50 percent Fibonacci retracement zone.
Tezos
Following a nearly 100 percent bounce off the golden retracement zone, Tezos pulled back to the area once again. Now, an inverted hammer appears to be developing on its 1-week chart that could trigger another rebound from current price levels. This type of technical pattern usually occurs at the bottom of downtrends and tends to push the price upwards, reversing the bearish trend.
Nevertheless, the strength of the 61.8 and 65 percent Fibonacci retracement zone has weakened since this is the second time XTZ has tested it.
If this cryptocurrency is indeed bound for an upswing then the buying pressure behind it must increase to allow it to break above the next level of resistance around the 50 percent Fibonacci retracement, that sits at $1.10. Otherwise, it could break below the golden retracement zone, which will ignite a further correction down to the 78.6 percent Fibonacci retracement level, $0.64.
When looking at the 3-day chart, Tezos could actually be continuing its trajectory within a descending parallel channel. At the moment, this cryptocurrency appears to be testing the resistance given by the middle line of the channel. Breaking above this area will likely accelerate the buying pressure behind XTZ, taking it to the top of the channel, which is also at $1.10. Conversely, if the middle line of the channel is able to reject the price of Tezos then it could trigger a steeper decline to the bottom of the channel, around $0.73 or lower.
Ethereum Classic
Ethereum Classic appears to be signaling a retracement to the lows of December 2018. This is due to the formation of a head-and-shoulders pattern on its 3-day chart.
ETC recently broke below the neckline of the pattern validating its bearish scenario. Now, this cryptocurrency could be on its way down to $3.20, which is the target given by the head-and-shoulders pattern. This is calculated by measuring the height from the neckline to the head of the formation.
Nonetheless, the TD sequential is currently on a red eight and could soon present a buy signal in the form of a red nine. If this bullish signal is confirmed, Ethereum Classic could move up to the neckline before continuing its downtrend.
A similar bearish outlook is given on ETC’s 1-day chart where a bear flag is developing. This is considered a continuation pattern that formed after the 25 percent plunge ETC experienced on Sept. 24, known as the flagpole—which was succeeded by the current consolidation period, known as the flag.
If this bearish formation is confirmed, it is likely that Ethereum Classic will end up moving in the same direction as the previous trend—predicting a 25 percent drop from the breakout point (determined by measuring the height of the flagpole).
Since this cryptocurrency is currently testing the support given by 78.6 percent Fibonacci retracement area, a spike in the selling pressure could take it to the December 2018 low of $3.30. However, if ETC is able to move above $5 it could jeopardize the bearish scenarios previously presented and surge to the 65 percent Fibonacci retracement level, $5.60.
Overall sentiment
The cryptocurrencies analyzed above have vastly different outlooks. Chainlink, for instance, appears to be bullish while Tezos is neutral and Ethereum Classic is bearish. This appears to be correlated with the current state of the market, with Bitcoin seemingly on the cusp of surging to $9,800 or dropping to $6,500. Due to the uncertainty, it will be wiser to wait for confirmation before entering any trade.
Nonetheless, it is worth paying attention to the bullish signals presented on Chainlink’s charts as well as the bearish signals on Ethereum Classic’s charts. Since both of these cryptocurrencies appear to have a clear path on their trend, trading them could pose less risk than trading Tezos, which looks more ambiguous.
The post Chainlink, Tezos and Ethereum Classic show mixed signals, but one of three is bullish appeared first on CryptoSlate.
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