• Chainlink’s LINK/USD has been consolidating since an abrupt selloff more than six months ago.
• There is a possible bearish flag forming and bulls and bears should wait for a breakout before acting.
• The measured move of a horizontal channel is the channel’s width, so look for a breakout in either direction and target the measured move.
LINK/USD Consolidation
Chainlink provides data to smart contracts on the blockchain, and LINK/USD has been consolidating for more than six months following an abrupt selloff. Both bulls and bears must have lost their patience as the price action evolves inside a horizontal channel.
Possible Bearish Flag
Whenever a horizontal consolidation appears on a chart, the technical trader should look on the left side for trending conditions. In this case, there is a bearish trend present, meaning that the horizontal consolidation might be part of a bearish flag pattern. Alternatively, it could also be carving out a bottom – but only if bulls can break above $9.5 (ideally above $10).
Measured Move
When looking at horizontal consolidations, it’s important to identify what’s known as the “measured move” which is essentially the channel’s width. This can be used as an indicator of where price may go once it breaks out of its current range in either direction.
Wait For Breakout
Both bulls and bears should wait for a breakout before acting because any attempt to predict how far price will go without one could lead to losses instead of gains. If price does break out from its current range then traders can use the measured move as an indicator of where it may go next.
Conclusion
The LINK/USD market is currently in consolidation mode which could potentially form part of a bearish flag pattern or carve out a bottom depending on whether bulls can break above $9.5 (ideally above $10). This means that both bulls and bears should wait for a breakout before acting with traders able to use the measured move as an indicator of where price may go next if it does break out from its current range in either direction