Crypto Nugget: ChainLink (LINK) in an Unlucky Downtrend?

The well-known oracle of the digital asset industry continues to grow as the months go by. However, like the rest of the market, the price continues to fall. Will the decline continue in the coming months in the context of strong selling pressure explained by the current macroeconomic environment? Let’s go to the charts to try and pinpoint the most likely scenario for the coming months.

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An asset back to the level of 2020?

LINK price on a weekly basis against the dollar

After hitting a record high of $53 in May 2021, the asset is in a weekly downtrend. The latter closed below the $33 area twice and acted as resistance. A selling force has emerged with an acceleration of the downtrend. You can see this in the oblique resistance that materializes the formation of falling tops.

After the bearish breakout from its support at $12, LINK moved into a second support zone quite quickly where it had recorded lows several times in the year 2020. Now it remains to be seen whether this level could let go by actively letting it continue as it is fall.

As we are currently in a downtrend, the chances of a breach of the current support should be considered with a return to at least $4.85. This level, which corresponds to a resistance in 2020, was never retested after the breakout. So in the event of a break in current support, investors will have to keep their fingers crossed that the price will react here.

LINK cryptocurrency price daily against the dollar
LINK price against the dollar on a daily scale

What we can see now is the rapid reintegration, on a daily basis, of the daily key level after a vigorous liquidation. While the trend is bearish, unless bitcoin decides otherwise, we may see an upward correction from the current downtrend.

What do I mean by that? After the sharp drop in the markets, we have to take into account a correction of this trend to start looking for the remaining liquidity. As it stands, watch for a close above $7.97 on the LINK, a level that is currently offering resistance in H4. With a favorable daily close, we can opt for a return on the daily liquidity gap (9.31 to 9.85 dollars).

The best-case scenario for this correction would be for the price to return to the supply zone (minimum $11.10) to close the remaining orders. In addition, this zone joins with a double technical zone that acts as a resistance in favor of the sellers. Note that in the current context, a LINK that closes clearly above USD 12 to reverse the downtrend would be too optimistic. So the bullish targets that are, I remind you, against the trend should remain reasonable.

LINK price against bitcoin on a weekly basis
LINK price against bitcoin on a weekly basis

Sometimes it seems interesting to me to make an analysis against bitcoin. Why ? It was the old unit of measure for altcoins before stablecoins came on the market. You can easily see the trend change on the chart. After a bullish period from August 2018 to December 2020, LINK is now in a bearish trend against bitcoin. You can see this trend with bearish lows and highs.

What is the plan for the future? If the current level drops to 2427 satoshis, LINK will continue to underperform against bitcoin. This represents a likely return to 1545 satoshis. In fact, the trend could even last for many months with a return to 830 satoshis and 579 satoshis. Don’t worry, we’re not there yet.

The purpose of this LINK/BTC section is to highlight the token’s underperformance against the king of cryptocurrencies. So, what to infer? If bitcoin falls, LINK will be the first to be affected. But if bitcoin goes up, the performance of the LINK will not be great. This trend could be reversed if the asset manages to recover 3950 satoshis, a level consistent with the previous weekly high.

Here we are at the end of the LINK’s analysis against the dollar and bitcoin. At this point, you need to remember that the king of oracles is underperforming against bitcoin and in a downtrend against the dollar. The macroeconomic backdrop is clearly unfavorable for the expansion of digital assets. However, given the speed of the downtrend over the past few weeks, we should consider a possible near-term reversal for an upward correction. At the moment the environment is uncertain. It is not impossible to fall to the levels indicated in the analysis without making the expected upward correction.

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