- LINK price witnesses a deep correction provides another discount to buyers.
- The impressive Point & Figure pattern showcases a low risk and high reward trade potential.
- Chainlink’s downward risks remain, though limited.
Chainlink (LINK) sustained bearishness during Tuesday’s session. The alt has dropped around 12% at some time over the past day. Nevertheless, market players anticipated the drop as LINK has surged more than 42% from its swing low of 15 December.
Chainlink Presents Re-entry Buying Opportunity after Massive Rally
Though the latest down move, LINK’s price retains bullishness. According to the asset’s $0.5/three-box Point & Figure chart, the previous X-column suggested a 29% upswing after a break past the triple-top. The current formation was to form a Spike Pattern. However, it created a Pole Pattern instead.
The entry strategy on a Pole formation after a correction is entering the three-box reversal with four-box stop-loss. While publishing this blog, Chainlink’s theoretical setup is a $35 profit target, $20.5 stop loss, and $22.5 buy-stop order. The trade setup offers a 6.4:1 risk-reward.
Nevertheless, beware that the prevailing O-column may extend a lower move. That translated to the theoretical buy stop for the alternative coin would drop lower also – the profit target and four-box stop-loss remain unchanged.
Meanwhile, a 2- to 3-box trailing stop will protect implied profits after entry. For instance, if the current zero-column moves lower by around five boxes towards $18, the theoretical buy-stop would stand at $19.5, stop-loss around $17.5 as the profit target maintains $35.
According to this LINK’s Point and Figure formation’s nature, the pattern does not have an invalidation point. That means the theoretical setup would remain at 3-box reversal regardless of how lower the zero column moves.
Alternative coins venture into downtrends after Bitcoin failed to stabilize past $51,000. The leading alt hovered around this mark before a swift dive towards the $47,000 mark. While publication, Bitcoin trades with negative sentiment at $47,937.
The world’s first crypto requires a steady move past the $50,000 threshold to support bullishness in the crypto market. That would help LINK clear upward obstacles with ease.