Chainlink's (LINK) price is currently moving sideways, influenced by broader market cues. However, a breakout opportunity is likely, as indicated by the Bollinger Bands, a tool that identifies price volatility and overbought or oversold conditions.
The price has hovered between $9 and $12 for most of the previous month, a trend not uncommon for LINK, which has seen consolidation periods of 32 to 83 days in the past. With 30 days of consolidation already, it seems more time is needed for a significant rise.
The Bollinger Bands, which consist of a middle band and two outer bands placed two standard deviations from the middle, narrow when volatility decreases. This squeeze often signals an upcoming surge in volatility and potential rise.
Past incidents have shown similar patterns. However, despite a squeeze in August and LINK rallying, broader market bearishness caused the rally to fail, extending the consolidation period further.
Additionally, a key group of investors, holding between 1 million and 10 million LINK, have been slow in accumulating. Over the past 11 days, they have only purchased $40 million worth of LINK, reflecting their skepticism and affecting overall investor confidence.
This slow accumulation contributes to a delayed recovery for LINK. Currently, LINK trades at $10.57, attempting to flip the $10.79 barrier into support. Success here could help break out of the current descending wedge pattern, aiming for a 37% rally to $15.6.
Nonetheless, a delay is probable, potentially resulting in consolidation under $12.3. Improvement in broader market cues could still lead to a rise. The breakout confirmation will come if LINK flips $12.94 into support, invalidating the bearish outlook.
