LINK has been one of the fastest growing cryptocurrencies of 2020, but will this growth continue? Various indicators are stating that the growth will continue and that this move down is simply a retracement.
Indicators set 1
The Ichimoku cloud is currently green with the candles above the cloud indicating further bullish movements ahead. This is supported with the MACD (Moving Average Convergence/Divergence) which remains bullish due to the 12 EMA remaining above the 26 EMA (Exponential Moving Average), however this is currently showing signs of a slowdown as seen with the MACD histogram.
Continued buying suggests continued bullish movement is ahead with the RSI (Relative Strength Index), showing that the trend is still very much bullish. LINK’s trend magnitude is significant, with the RSI over 60 for the whole of July.
Indicators set 2
On the contrary, the Heikin Ashi is pointing towards a period of downwards movement. This is seen with the most recent Heikin Ashi candle being red, suggesting that a retracement may be in place.
If this downwards movement continues it would see the SAR (Stop And Reverse), a momentum indicator, flip. This would suggest that the momentum has switched from bullish to bearish. The gap between the SAR line and the candles is very small, the wick of the recent downwards candle is almost touching the SAR line. It is important to note that with strong trends, the SAR is a very effective indicator. If the SAR did flip then a retracement would be highly likely, although to what extent could be indicated with the BBs (Bollinger Bands).
A retracement would likely see LINK test the median line (red line) of the BBs. If this occurred LINK would fall to around $6.5 USD, a 17% loss from LINKs current position.
Indicators set 3
There are however more indicators which are suggesting that the price will continue to rise, with even the PnF (Point and Figure) chart indicating a buy signal through a rising bottom.
The PnF has a green area which is an indication of further positive price movements. Continuation of positive movement is also being indicated with the WWV (Weis Wave Volume) despite it being green and the QQE MT4, which remains positive. This is due to the yellow line positively crossing over the red line.
Overall the expectation is that the bullish movement will continue. Some indicators are suggesting that a reversal will occur, opening up a potential dip buy opportunity, before further price increase. The overall trend for LINK remains bullish.
XLM/USD pre – analysis
Stellar has seen huge growth in recent weeks. This occurred due to XLM breaking out positively from a descending wedge formation with a bullish trend before. The descending wedge had multiple verification points of contact.
As can be seen, this descending wedge had a positive breakout. The downwards resistance line then proceeded to act as support for the breakout, confirming that it had occurred. Below we can see the bullish trend before the descending wedge and the positive movement after the breakout.
How long will this last? Is XLM close to running out of steam?
Indicators set 1
Normally, we would begin with the Ichimoku cloud. However looking at historical XLM data against the Ichimoku we found it to be highly inaccurate, so will therefore start with the KC (Keltner Channels). The KCs are currently looking bullish, with the top level of the KC providing support. This therefore indicates that the current trend is very strong.
Due to the continued support it also indicates that this upwards movement is very unlikely to be a simple pump. Alongside the KCs we also have the BBs width, this is useful for indicating volatility and the continued progress of a move.
As we can see with the indicator BBW (Bollinger Band Width) it is beginning to plateau. This indicates that the aggressive move upwards is beginning to slow down, however does not indicate that the move is over. Another indicator which is pointing towards further bullish movement, although a slowdown is the BSM (Bollinger bands MACD). The shift from the red area towards the green is a reversal sign / bullish. All the time the indicator is green, it suggests that further bullish movement is in store.
Gann TA analysis XLM/USD
Gann was a financial trader/mathematician who based his trading method on four things. These were geometry, astrology, astronomy and ancient mathematics. We will be using only the geometry and mathematics part of his trading strategy for this small piece.
Gann analysis is very useful for finding the support / resistance lines of a cryptocurrency and the trend direction. Above, the following indicators have been used:
- Gann High Low
- Pivots HL
- Pivots Traditional
- Gann Fan
There are also various other indicators for Gann analysis such as the Gann square or Gann Box. However, we find that the combination of these four indicators is the most effective.
In this analysis, we can see with the Pivots Auto (Pivots Standard) that XLM is currently finding support from the R2 level. The price being above the centre pivot and moving into R2 shows that XLM has bullish momentum and that the pivots are acting as valid support.
This coincides with the Gann Fan, with the move above R2 meaning that XLM is now into the ½ area instead of the previous 2/1 section. Therefore the centre 1/1 fan line should act as minor support, with the main gain from this being that XLM has now moved into the increased price area. Finally the Gann High Low is indicating further positive movement. It is currently well below the price: this indicates that further positive gains are in front of us. It also suggests that XLM can have a healthy retracement while maintaining its positive momentum.
Indicators set 2
Currently, the QQE MT4 indicator is bullish, with the yellow line seeing a positive crossover above the red line.
The SAR is also bullish as seen with the blue dots below the candles, the space between the candles and the dots being significant. Alongside this the SAR did not go above the candles when XLM saw a slight dip, as shown with the top red box in the right hand box; indicating that the momentum behind XLM is strong.
A point of slight concern is the EFI (Elders Force Index). When using the EFI it is important to remember Newton’s third law. “What goes up must come down”. The EFI is currently running high, it could push higher, although this is uncommon. Therefore the EFI is hinting at a potential minor reversal.
Finally, the Heikin Ashi candles: the Heikin Ashi is currently bullish. However, the length of the continued positive momentum is somewhat dubious due to an uncanny recreation of the first yellow boxes upwards movement.
On the whole, XLM is looking bullish. However, it appears that the strong movement seen over the last couple of weeks is losing force. As seen above, the majority of indicators and TA used, points towards further bullish movement. This bullish movement alongside the descending wedge formation could fuel even further upwards movement.
This intelligence report is for marketing and educational purposes only. The views, analyses and projections are based on the independent research, but cannot be taken as a form of investment advice.