Chainlink (LINK) Price Analysis: Potential Correction Looms Amid Overextended Rally

Monday, 20 May 2024, 12:00
Chainlink's price surged to $16.8, marking a key resistance breakout, but indicators suggest overbought conditions. Investors could face profit-taking decisions due to overextended gains, leading to a possible correction. If support levels fail, a decline towards $15.0 is likely, while sustaining above $17.5 may propel LINK towards $18.
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Chainlink (LINK) Price Analysis: Potential Correction Looms Amid Overextended Rally

Chainlink (LINK) Set for Correction as Rally Overextends Bullishness

Chainlink's price surged to $16.8 after a breakout from a key resistance level, triggering concerns of overbought conditions. Investors may opt for profit-taking as indicators signal potential corrections with previous instances in February. Maintaining above $17.5 could drive LINK towards $18, while breaking support at $15.6 may lead to a decline to $14.4.

Chainlink Investors May Book Profits

Chainlink's 30-day Market Value to Realized Value (MVRV) ratio of 16% indicates profit-taking, making it a risky zone for corrections. The Relative Strength Index (RSI) above 70 suggests overbought levels on the 12-hour chart, signaling a potential pullback. Investors could secure gains, anticipating a drawdown if selling pressure increases.

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