Friday $LINK Special: History and Future of ChainLink

07 Jun, 2019
by Lourens Pepler
Price Analysis
Friday $LINK Special: History and Future of ChainLink

LINK has been one of the strongest performing coins this past year and still looks like it's going strong. Today we are looking at the past performance of LINK and what lies ahead for ChainLink on a higher time frame. This is a special Friday addition of $LINK analysis for 7 June 201

Highlights:

- LINK entered bull phase in similar way than XRP in early 2017

- Elliot wave structure on the daily

- Bigger Elliot Wave forming?

Before we look at today's chart and current price levels, we first have to take a few steps back and look at how ChainLink has been performing in since the start of 2018. We will only be focusing on the daily chart, as that is where the readable market structures lies.

Similar to our TRX vs XRP analysis from 6 June, we are able to spot the 4 events that lead up to LINK entering its bull phase. We won't go over all the step again, but what's important to notice is that LINK broke resistance on price and momentum in August 2018 by completing an impulse wave.

LINK/BTC chart provided by Tradingview

As we know we are able to measure impulse waves with a Fib tool. This gives us an idea where price can retrace or expand to in the future. Plotting it out and measuring from the low to the high now lays out the retracement levels for the first impulse wave. There is a very high chance that you will almost always be filled near the 50% and 61% levels. Spreading your orders between those two levels normally guarantees a good entry to ride the next impulse wave.

LINK/BTC chart provided by Tradingview

Moving forward we are able to see that LINK managed to reach the buying box, and some order would have been filled if we had spread orders between the top and bottom of the box.

LINK/BTC chart provided by Tradingview

What we now see forming is the start of an Elliott wave structure. So far we have wave 1 and wave 2, and since price bounced off the box, indicated that wave 3 has started. As we know, a rule of Elliott Wave is that wave 3 cannot be shorter than wave 1 in length, and for us to know what levels might be reached during this impulse wave, we now need to swap around the fib tool and measure from high to low to see the possible expansions. This Fib extensions tell us that an expansion to 161% fib would take LINK to 7112 sats, and possibly to the 261% near 10000 sats.

LINK/BTC chart provided by Tradingview

Wave 3 ended up pushing through the 161% fib, and made a move all the way up to the 261% fib extension, reaching a high of 9990 sats. Now we know wave 4 cannot retrace deeper than the dop of wave 1, so playing it safe and putting an entry box between the 127% and 100% fib lines, normally guarantees a good entry for the final impulse wave to come.

LINK/BTC chart provided by Tradingview

Again moving forward we are able to see wave 4 retracing perfectly to the buy box, and respecting the top of wave 1 by not penetrating it, before moving on to complete the final impulse wave. Usually, wave 5 is the largest wave in the set and can expand to highest expansion possible, the 423% fib line.

LINK/BTC chart provided by Tradingview

Moving forward for the last time, to now see the complete Elliot wave structure, we can see that LINK managed to expand all the way up to the final Fib line, reaching a high of 15800 sats. Since the wave structure was complete, LINK then performed an ABC correction, before returning to upside action.

LINK/BTC chart provided by Tradingview

Larger Elliot Wave forming?
With Elliott Wave theory, we know it is possible to have waves within waves, and now zooming out to see current structure on a weekly chart, we can spot the possibility of a larger Elliott Wave structure forming. Again using our Fib tool and measuring the first impulse wave lays out possible future expansion levels. We can already see that wave 1 and wave 2 has completed, with wave 2 retracing into the general buy box between 50% and 61% fib lines, before starting wave 3.

We are now able to plot out the possible Elliot Wave structure, assuming LINK can follow the same structure on the weekly, as it did on the daily. Seeing that most alts are starting to rise, could indicate the start of altcoin season. If that is the case, then LINK can expect a nice Bull run that lies ahead.

RSI is also on our side, with it being above 50 and also pointing up on the weekly, indicating strong bullishness. Our first target for this wave will be at the 261% extension, near 37600 sats. Our main target for the entire cycle is at the 423% extension, near 59400 sats.

LINK/BTC chart provided by Tradingview

Do you think LINK will be able to complete another Elliot wave structure on this high time frame? Let us know what you think in the comments below!

Disclaimer: Keep in mind this not investment or trading advice, just the opinion of our analysts. As always, do your own research, make your own decisions.

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