• The LINK/USD pair is in a long-term consolidation following an abrupt selloff.
• The price action evolves inside a horizontal channel, and until a breakout, the chances are that it will go nowhere.
• Technical traders should look to the left side of the chart for trending conditions as the consolidation might be part of a bearish flag pattern.
The LINK/USD pair is currently consolidating after an abrupt selloff. This means that neither buyers nor sellers have been able to take control of the market, resulting in a sideways price action with no clear direction.
The price action has evolved within a horizontal channel, with buyers appearing on every attempt to trade below $6 and sellers appearing on every bounce up towards $8. Until a breakout from this channel occurs, it appears that the market will remain range-bound with no clear direction.
Bearish Flag Pattern
Technical traders should look at the left side of the chart for trending conditions as this consolidation might be part of a bearish flag pattern. If this proves true, then bears will likely remain in control until they manage to break out above $9.5 or ideally above $10 before bulls gain any momentum.
If there is indeed a breakout from this horizontal channel, then traders can expect the measured move – which is equal to the width of the channel – as their target price when entering trades based on this setup.
It appears that LINK/USD is stuck in an extended sideways trading range with no clear direction until we see a breakout from either side of this horizontal channel. Both bulls and bears should watch closely for signs of such breakouts before acting so they do not miss out on any potential profits generated by such market movements.