Chainlink is facing increasing bearish pressure as its price continues to edge lower, signalling a potential move toward the further downside. After a period of consolidation, the bears have regained control, pushing Chainlink closer toward the $9.28 support level.
However, bulls may not be ready to give up just yet. With market sentiment fluctuating, the possibility of a bullish comeback looms on the horizon. By examining key technical indicators and market sentiment, we seek to determine if LINK is poised for a deeper decline or if bullish forces could reverse the current trend and drive the price upward.
At the time of writing, Chainlink was trading around $10.59, marking a 0.10% decline over the past day. The cryptocurrency’s market capitalization stood at approximately $6.4 billion, while trading volume exceeded $206 million, showing increases of 0.10% and 15.36%, respectively.
Current Market Sentiment: Bearish Pressure Mounts On Chainlink
On the 4-hour chart, following a successful drop below the $11 mark, LINK has continued to experience negative momentum, dropping toward the 100-day Simple Moving Average (SMA). As the cryptocurrency approaches the 100-day SMA, it could either find temporary support or risk further declines if the bearish momentum continues to intensify.
Also, the Relative Strength Index (RSI) on the 4-hour chart, has dropped below the 50% threshold, now sitting at 42%. With the RSI attempting to move deeper into the oversold territory, it shows that bears are gaining control, and an extended decrease could be on the horizon if buying interest does not pick up soon.
On the daily chart, Chainlink is currently making a bearish movement, toward the $7.14 trading below the 100-day Simple Moving Average. This movement underscores strong selling pressure and negative market sentiment, signaling a heightened risk of further losses.
Lastly, the 1-day RSI reflects increasing pessimistic pressure on LINK, as the indicator has fallen to 47% after briefly crossing above the 50% threshold. This drop highlights mounting selling activity and signals a stronger potential for additional downward movement.
Will LINK See A Recovery Or Further Decline?
As the cryptocurrency approaches the $9.28 support level, which could spark a potential rebound, technical indicators like the RSI still point to strong selling pressure. If LINK fails to hold this level, a break below could result in persistent declines, potentially testing the $7.14 support level and even lower thresholds.
However, should Chainlink manage to hold above this crucial support level, it could set the stage for a potential upward move toward the $11.10 resistance. A successful breakout through this resistance could ignite a significant rally, paving the way for the price to aim for the next key resistance at $12.44. If bullish momentum continues to build, Chainlink may even reach higher levels, extending the rally beyond current resistance points.
Featured image from Medium, chart from Tradingview.com