We have gotten a bit oversold and I think there will be a certain amount of value hunting, but the question is whether or not they can hang on.
Chainlink rallied a bit on Wednesday heading into the FOMC announcement, gaining over 8%. That being said, we are bouncing from an extraordinarily low level, so it does make sense that we would see a bit of a recovery. After all, markets do not go in one direction forever, be it up or down. The $14 level seems to be a bit of a floor from a longer-term perspective, so again, it is not a huge surprise that the market has tried to stabilize.
That being said, if the market were to break down below the $14 level, it is very likely that we will continue to go much lower. In the short term, it would not surprise me at all to see this market go back and forth and chop around as we try to figure out whether or not bullish action can return. Do not forget that we need to see Bitcoin start moving to the upside before other alt coins such as this one can get going. So far, it looks as if we are trying to stabilize, but if the Federal Reserve does in fact stay very hawkish, that could put the kibosh on any type of rally when it comes to crypto in general.
To the upside, the $20 level will more than likely offer a bit of psychological resistance, but I do not think it is a major area of resistance that will cause longer-term problems. I think this is a market that could go as high as $25 if we do in fact break out to the upside. That does not necessarily mean that it is going to be easy to get there, but that would be my longer-term move. After that, then we are looking at the $28.50 level, but I think it is difficult to imagine a situation where we would simply shoot straight up in the air.
We have gotten a bit oversold and I think there will be a certain amount of value hunting, but the question is whether or not they can hang on. When you look around the world, there has been a massive “risk on rally” heading into the FOMC, which typically means that we may get a bit of disappointment heading into it. That does not necessarily mean that we will break down, just that I do not think we are going to plow higher unless Jerome Powell changes direction completely.
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