Chainlink (LINK) daily charts have triggered a golden cross, adding to the growing number of cryptocurrencies that have given such a signal.
But unlike other coins, LINKUSD has been in tight consolidation for nearly 300 days. Here’s more on why that number and supporting technicals makes the daily golden cross that much more significant.
LINKUSD Triggers Daily Golden Cross: What It Means
A golden cross in cryptocurrencies, stocks, forex, or other financial market, is a buy signal that suggests that the trend could be turning increasingly bullish.
The buy signal and “golden cross” takes place when a short-term moving average crosses above a long-term moving average from below. The opposite signal, when the short-term crosses below the long-term moving average from above, is called the death cross.
When LINKUSD last death crossed on the daily Chainlink was trading at above $20 per coin. In fact, two death crosses took place around this level, along with a failed golden cross.
The failed golden cross could leave crypto investors and traders feeling skeptical and not wanting to get caught in a fakeout yet again. However, the latest Chainlink golden cross is coming after a nearly 300-day consolidation phase.
Why 300-Day Consolidation Could Mean A Huge Move In Chainlink
Consolidation comes either at a top or a bottom before a reversal, or mid-trend ahead of continuation. The longer the time spent in a trading range, the larger the breakout from the range.
LINKUSD has been in a trading range for nearly 300 days and counting, suggesting a massive move ahead. The low volatility phase has led to the tightest weekly Bollinger Bands in the history of Chainlink.
The extreme low volatility state has persisted for more than half of the consolidation phase, adding to the potential power of a breakout and expansion of the Bollinger Bands.
Simply put, when volatility returns, Chainlink could take off like a rocket, or fall off a cliff – depending on the direction of the breakout. A golden cross on the daily timeframe at such substantial lows could add to the probability of the direction being up.
A large move to the upside in Chainlink could signal that its bear market low is in and lead to a more significant and sustained recovery – especially if the token is joined by broader participation from the rest of the cryptocurrency market.
