The cryptocurrency market continues to move in a consolidation phase since the beginning of the week, with major altcoins showing neutral price movements. The largest altcoin, Ethereum (ETH), remains near the significant support level of $3,800, indicating a cooling in price action. This consolidation reflects a broader market trend where price action remains stagnant, awaiting a potential breakout or further consolidation. In contrast, the popular altcoin Chainlink (LINK) has seen a significant downtrend after enjoying a bullish trend over the past two weeks.
Technical Indicators Signal Negative Outlook for Chainlink
During this period of increased bullish sentiment in the cryptocurrency market, Chainlink formed an ascending channel pattern on the 4-hour timeframe. However, the price has since broken out of this formation, indicating a shift in momentum towards the bears. At the time of writing, LINK is trading at $17.91 with a circulating supply of 587,099,970 and a market cap of $10.47 billion, ranking 13th by market cap.
Technical indicators point to a bearish outlook for the altcoin. The Simple Moving Average (SMA) on the 4-hour chart shows a downtrend, indicating a high likelihood of a bearish trend in the near future. This suggests that selling pressure may continue to outweigh buying pressure.
Additionally, the Moving Average Convergence Divergence (MACD) indicator shows a continuous rise in the red histogram, indicating an increase in selling pressure. The averages in the MACD also show a significant decline, signaling that the price may continue to lose value over the coming weekend.
What’s Next for LINK?
Looking ahead, the key question is whether LINK’s price will go up or down. At this point, if the market regains momentum, LINK is expected to retest the resistance level at $18.25. If the bulls manage to hold the price above this level, it could pave the way for LINK to test the upper resistance level at $19.22 in the near future. Such a scenario would indicate a potential recovery and continuation of the bullish trend.
On the other hand, if the bears maintain control of the market, it is highly likely that the altcoin will retest the significant support level at $17.20. If the bulls fail to defend this level, the price could fall further and retest the crucial support level at $15.92 in the coming weeks. This would indicate a continuation of the bearish trend and a significant challenge ahead for LINK investors.
