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Chainlink (LINK) Is on the Edge of a 21% Correction

Chainlink (LINK) Is on the Edge of a 21% Correction

Explore Chainlink's potential 21% price drop, influenced by technical patterns and investor activity.
3 minutes
05.04.2024
Editor Satoshi`s Secrets
Chainlink (LINK) Is on the Edge of a 21% Correction

In Brief

Chainlink (LINK) faces a potential 21% price drop from a current $17.2, influenced by a bearish head-and-shoulders pattern and a decline in active network addresses. A critical support range between $15.56 and $17.48 may offer some resistance to the fall, with a reversal dependent on surpassing a $17.85 threshold.

Chainlink (LINK) is seemingly headed for a notable decline soon, triggered by the appearance of a bearish reversal signal.

Nonetheless, sellers are advised to proceed with caution. The expected decrease might face obstacles, which could limit the severity of the decline.

Chainlink Investors Begin to Withdraw Recently, Chainlink’s price has undergone a correction, resulting in the cryptocurrency currently trading at $17.2. This downturn is likely to continue due to several factors, including a decrease in investor engagement.

The number of active addresses transacting on the network has seen a significant drop of approximately 44.7% in the past two weeks, going from 5,560 to 3,070. This reduction in network activity indicates a waning interest from investors.

Active Chainlink Addresses Data, Courtesy of IntoTheBlock

Additionally, the Relative Strength Index (RSI) currently resides in the bearish territory, hovering near the 40 mark. This momentum indicator tracks the velocity and magnitude of price fluctuations, where values above 70 suggest a market is overbought, and those under 30 hint at oversold conditions.

Therefore, given the RSI’s positioning, Chainlink’s value is at a significant risk of experiencing a sharp downturn in the future.

Chainlink RSI Data, Provided by TradingView

Decline Analyzing from a technical standpoint, Chainlink seems to be bracing for a forthcoming correction. The emergence of a head-and-shoulders pattern on the daily chart signifies a potential bearish turnaround.

With the neckline situated at $17.85, acting as a support barrier, a consistent close beneath this mark may initiate a downward adjustment to $14.02, equating to a 21% reduction.

LINK Price Graph, Courtesy of TradingView

Yet, a significant accumulation of LINK tokens within the $15.56 to $17.48 range could impede the downward trend. Given that investors are likely to avoid selling at a loss, this range may serve as a foundation of support for Chainlink’s value. Nonetheless, for Chainlink to overturn the bearish scenario, its price must rise beyond $17.85.

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