Chainlink, specializing in blockchain-based oracle services and dominating its field, promises a bright future. Its recent partnerships, vision, announced goals, and other news suggest that it can reach much higher levels in the future. However, it has been struggling with the exhausting atmosphere of the bear market for a long time.
Last week, Chainlink had a positive outlook on the price chart. Bulls were strongly testing the $7.7 resistance zone, but sellers emerged victorious. After retesting the same resistance zone, the price dropped by about 10% within 36 hours on August 14th. Considering the negativity in the Bitcoin price, this is not surprising.
Technical indicators suggest that LINK could drop further in the next few days. RSI showed a strong downward momentum, and OBV noted an increase in selling volume in the past two days.
The four-hour ascending order block ranges between $7 and $7.2. This was the region where LINK started its previous rally and got rejected at the $7.7 level. Retesting this region could provide a bounce in prices. However, this did not happen. The recent selling wave saw a large candle with significant trading volume closing below the order block in the four-hour trading session. Therefore, this region is expected to serve as resistance as it has turned into a bearish breaker block.
If the downtrend continues, the levels of $6.58 and $6.06 need to be examined. Bulls may make efforts for a bounce at these levels. Short sellers may try to enter positions targeting these levels with invalidation above the breaker block.
The drop in the Chainlink price from $7 to $6.8 led to the liquidation of significant long positions. If allowed by BTC, this relief in the futures market could pave the way for a recovery. However, there are no developments that will turn the overall market sentiment positive. If we do not see any surprises in today’s FOMC Minutes at 21:00, we will likely witness a further intensification of the downturn.
In the worst-case scenario, there are support levels that extend down to $4. Although LINK seems like a good long-term alternative, rushing into it may not yield good results for now.