LINK Targets $6.85! Parabolic Macro-EW Count for CHAINLINK!
Hello everyone, I'm back from my holiday! It's good to be back. I missed looking at the charts and making new analyses, but I did keep up with reading the news in the space.
Let's get into the chart. What you are looking at is the log chart for chainlink on the 4 hour. This means that unlike the linear chart, it increases by orders of magnitude
rather than 1 point at a time. The implications of this are that the further up the price goes, the less it will show on the chart. It is often used for long term analysis.
I'm sure you are already aware that a straight line on the log scale that goes across multiple points would not work on the linear scale, which is the default for tradingview.
Yes, that means that a straight line on the log scale is the same as a parabolic line on the linear scale.
So do we have some straight lines here? Yes, some, as it is forming a triangle formation right now which is also clear on the linear scale, as it is in the short term.
But what is interesting here is that if you zoom out (click and drag on X axis on the chart) then actually what I am seeing is that we are PARABOLIC ON THE LOG CHART going all the way back to 42 cents.
This implies a very strong parabolic move of parabolic moves, and actually we just saw a bounce off of it on the 4 hours chart.
Now we seem to have completed 2 out of 3 impulse waves of this 5 wave move which looks like a fantastic setup so far to go long on wave 5. Wave 4 seems to be the ABCDE triangle correction wave that forms this white triangle on the short term. The parabolic line can even be afforded a wick down to touch the bottom of the triangle as it is only a vague line and not possible to draw exactly to the point. Another scenario is we don't touch the bottom of the triangle and just assume that E is done already.
So assuming we have finished 4 already, and we are about to start 5, we can get the targets of wave 5 by using a trend based fib extension from the start of wave 1 up to wave 3 and extended from the bottom of wave 4.
IF LINK DOES BREAK OUT UPWARDS, I expect it to continue following the parabolic line in the near term, and possibly even reach the 1:1 extension.
MACD still hasn't crossed over, so if you want to be a bit more conservative you can wait for that on the 4 hour. On the other hand the daily MACD is still above, and RSI is very high, which indicates we could either still continue sideways for a little bit, or if we do pump now then afterwards I expect a big correction.
Parameters for this trade:
-Entry: 3.3- 3.7
-Target 1: 5.49
-Target 2: 6.09
-Target 3: 6.85
-Stop loss: 3.23 (Below triangle bottom)
So this a 17:1 risk reward guys, pretty happy with this. I really do see a big move up OR down coming on the macro level, both from fundamentals and technicals. Also possible to make a sideways break of the triangle, which I'd also see as bullish consolidation. If it does drop below the triangle, the EW count could still be valid as a really big wave 4 as long as it doesn't cross below the top of wave 1 at $2.08, which would also be interesting to see in the long term.
Please don't forget to leave a like and let me know what you think! I appreciate the support.
-Etch
Let's get into the chart. What you are looking at is the log chart for chainlink on the 4 hour. This means that unlike the linear chart, it increases by orders of magnitude
rather than 1 point at a time. The implications of this are that the further up the price goes, the less it will show on the chart. It is often used for long term analysis.
I'm sure you are already aware that a straight line on the log scale that goes across multiple points would not work on the linear scale, which is the default for tradingview.
Yes, that means that a straight line on the log scale is the same as a parabolic line on the linear scale.
So do we have some straight lines here? Yes, some, as it is forming a triangle formation right now which is also clear on the linear scale, as it is in the short term.
But what is interesting here is that if you zoom out (click and drag on X axis on the chart) then actually what I am seeing is that we are PARABOLIC ON THE LOG CHART going all the way back to 42 cents.
This implies a very strong parabolic move of parabolic moves, and actually we just saw a bounce off of it on the 4 hours chart.
Now we seem to have completed 2 out of 3 impulse waves of this 5 wave move which looks like a fantastic setup so far to go long on wave 5. Wave 4 seems to be the ABCDE triangle correction wave that forms this white triangle on the short term. The parabolic line can even be afforded a wick down to touch the bottom of the triangle as it is only a vague line and not possible to draw exactly to the point. Another scenario is we don't touch the bottom of the triangle and just assume that E is done already.
So assuming we have finished 4 already, and we are about to start 5, we can get the targets of wave 5 by using a trend based fib extension from the start of wave 1 up to wave 3 and extended from the bottom of wave 4.
IF LINK DOES BREAK OUT UPWARDS, I expect it to continue following the parabolic line in the near term, and possibly even reach the 1:1 extension.
MACD still hasn't crossed over, so if you want to be a bit more conservative you can wait for that on the 4 hour. On the other hand the daily MACD is still above, and RSI is very high, which indicates we could either still continue sideways for a little bit, or if we do pump now then afterwards I expect a big correction.
Parameters for this trade:
-Entry: 3.3- 3.7
-Target 1: 5.49
-Target 2: 6.09
-Target 3: 6.85
-Stop loss: 3.23 (Below triangle bottom)
So this a 17:1 risk reward guys, pretty happy with this. I really do see a big move up OR down coming on the macro level, both from fundamentals and technicals. Also possible to make a sideways break of the triangle, which I'd also see as bullish consolidation. If it does drop below the triangle, the EW count could still be valid as a really big wave 4 as long as it doesn't cross below the top of wave 1 at $2.08, which would also be interesting to see in the long term.
Please don't forget to leave a like and let me know what you think! I appreciate the support.
-Etch
Comment:
Small IH&S being formed by the bulls in resistance zone.
Comment:
We got a bit of a descending triangle that broke down on the BTC chart. Support should be in that red zone.
Comment:
This green zone should hold, or we will likely go down to the next support (green line). Bulls are trying to create a hammer.
Trade closed: stop reached:
New analysis
New analysis
Looks like it could form a bullish wedge though.