Oracle for Startups has been collaborating with Chainlink in order to develop a blockchain project for startups. The goal of this project is to create an ecosystem in which startups are able to generate revenue from smart contracts that are executed on the blockchain.
As a part of this project, the first 20 startups have already been selected. Chainlink allows smart contracts on various networks to connect with resources. Its infrastructure, combined with the Oracle blockchain platform, will provide reliable inputs to smart contracts.
Cryptocurrency trader @scottmelker stated that he believes that Chainlink is a strong long-term project — which could be considered a good investment. However, according to him, the current price pattern suggests short-term decreases.
Strong project long term, potentially good investment etc. Don’t be mad. As a trade, I would personally be looking to take profit. Potential head and shoulders (not tradeable unless blue line is broken) and decreasing volume on each move up. Not a recipe for continuation. pic.twitter.com/oXQ1HJG6wj
— The Wolf Of All Streets (@scottmelker) November 13, 2019
The tweet shows a developing head and shoulders pattern with decreasing volume since the left shoulder.
Let’s look at the Chainlink price movement — along with technical indicators — to see if the LINK price will break down from this pattern.
Since reaching a low of 14,778 satoshis on September 13, the LINK price has been increasing significantly. The current price level amounts to a 140 percent increase in only 62 days.
Due to today’s bullish candle, we believe the possibility of an H&S is invalidated since the right shoulder has the same height as the head.
However, the price can still make a triple top at 37,000 satoshis, which likewise is a bearish price pattern.
The horizontal support line is found at 28,000 satoshis.
Bearish Momentum Indicators
Another bearish development comes after looking at momentum indicators. Both the RSI and MACD have developed significant bearish divergence throughout the three tops.
The divergence is especially pronounced in the MACD. This solidifies the bearish outlook and makes it likely that the Chainlink price will revisit the support line at 28,000 satoshis.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
Images courtesy of Twitter, TradingView.
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