Indicator Signals ‘Buy’ for Chainlink (LINK) as Key Metrics Turn Bullish: Here’s the Outlook

Chainlink price action is showing signs of a potential reversal. This was revealed in a post by Ali, a popular crypto analyst on X.

A popular crypto analyst has spotted a buy signal for Chainlink (LINK) as one key indicator turns bullish. This comes after a period of bearish pressure.

TD Sequential Suggests A Top Is In

The analyst, known as Ali on X, notes that the TD Sequential indicator has now printed a buy signal on the daily chart. This is indicated by the number “9” with an upward arrow.

In technical analysis, TD count signals are used to identify potential reversals or trend continuations. They are based on a count of specific candlestick patterns and are typically used to suggest timeboxes for traders to watch. These signals are often seen after a period of strong bullish or bearish pressure.

After several days of sharp declines and bearish candles, which may have signaled strong selling pressure, this signal from the TD Sequential suggests that LINK may be setting up for a bounce.

Credit: Ali via X

The green candlestick pattern also suggests that a reversal, or at least short-term bounce, may be in the works at a key support level.

This candlestick formation is noteworthy as it occurs at a previously established support zone, which emerges after a period of sustained downward movement. In this case, the support level is located around $15.15.

The presence of a lower wick suggests that sellers initially pushed the price lower, but buyers stepped in to prevent further declines and ultimately drove the price back up. This lower wick signifies the rejection of lower prices by buyers.

After a period of bearish pressure, a green candlestick is forming, suggesting that buyers may be regaining control, especially if the close is higher than the open.

This green pattern, following a strong red candlestick, suggests a possible reversal or temporary relief from the downtrend. If followed by additional green candles with increasing volume, it could mark the beginning of a meaningful recovery.

Two scenarios appear possible from here. The first is a bullish case where the next few candles continue to close higher with increased volume, potentially signaling the start of a recovery.

On the other hand, a bearish continuation is possible if the price fails to break above the resistance formed by recent lows. If sellers remain in control and volume decreases, it could indicate further downward movement.

If buyers continue to accumulate at these levels, we might see LINK move toward previous resistance levels around $16.50 – $17.00. However, traders should wait for confirmation in the form of a strong bullish candle closing above resistance before establishing long positions.