• Chainlink was benefiting from the general bullishness among traders of cryptocurrencies.
  • The current correction in Bitcoin and other majors is generating red lights for Chainlink.
  • Important support has been broken, and the upside looks muted.

Chainlink (LINK) has experienced a run higher, helped by the favorable tailwind in cryptocurrencies over the past few weeks. But the sentiment is turning a little bit, and Chainlink even starts to look heavy. Some short-term profit-taking is normal, but the critical green ascending trend line was already broken after the second test yesterday. This sets off alarm bells for investors that Chainlin’s positive rally might come to an end. Once that is the case, buyers will take their money and run and leave LINK as prey for short-sellers to run prices down.

Chainlink looks to be on the verge for a correction

A look to the upside does not help to find more motivation for buyers to support the rally. At the beginning of the week, LINK formed a double top originating from June 5 and could not stay above. $30.21 looks to be a level that needs to be broken and closed above if Chainlink wants to add more fuel to its rally.

A little bit further up, another significant resistance level is cause for little upside. At $33, there is another double top originating from June 1. This means that in a concise area of just a $3 range, buyers face two resistance levels where profit taking will occur, and the rally will lose steam.

LINK/USD daily chart
LINK/USD daily chart

The fact that the first double top at $30.00 already causes the green ascending trend line to break to the downside is not good news. Expect buyers to get out of their positions, opening an opportunity for price action to correct quite rapidly.

The actual first level of support is at $23, which is next to a pivot level and a supporting pivot. However, that has been chopped up quite a fair bit at the beginning of August. Do not expect much of that level. Instead, look further lower toward $20 as a big figure and the 55-day Simple Moving average that will support the price action.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed Join Telegram

Recommended content

Recommended Content

Editors’ Picks

Shiba Inu, one of the so-called “Dogecoin killers,” signals a hot crypto summer

Shiba Inu, one of the so-called “Dogecoin killers,” signals a hot crypto summer

Shiba Inu (SHIB) price is set to start an outperformance after the crypto winter that put investors and bulls in hibernation since March of this year. As more signs point to a turnaround, it is time to put money to work for investors as price action gets underpinned, with $0.00001100 aligning as the line in the sand and the monthly S2 support level as additional support.

More Shiba Inu News

Do Kwon in trouble as Korean police urges Upbit, Bithumb, Coinone, Korbit and Gopax to freeze Terra’s assets

Do Kwon in trouble as Korean police urges Upbit, Bithumb, Coinone, Korbit and Gopax to freeze Terra’s assets

Do Kwon faces legal proceedings in South Korea while endorsing a revival plan to fork Terra with a new token, excluding TerraUSD. On Wednesday, South Korean authorities are scheduled to meet cryptocurrency exchanges Upbit, Bithumb, Coinone, Korbit and Gopax after instructing them to freeze Luna Foundation Guard assets. 

More Terra News

Where Ethereum price will go as it prepares for bullish breakout

Where Ethereum price will go as it prepares for bullish breakout

Ethereum (ETH) price is set to jump 18% in value if a tailwind persists throughout the trading day. Although the ASIA PAC session saw some dark clouds forming over disappointment at the Chinese government’s support package and this pushed Asian shares to the downside.

More Ethereum News

Identifying an opportunity to time SafeMoon’s breakout

Identifying an opportunity to time SafeMoon’s breakout

SafeMoon price seems to be making a comeback after crashing for nearly five months. This downswing formed a base around a significant support level and has bounced back exponentially. For now, investors can expect SAFEMOON to continue this ascent until it tags a critical resistance barrier.

More SafeMoon News

Bitcoin: The last rebound before capitulation

Bitcoin: The last rebound before capitulation

Bitcoin is showing bullish signs in the lower time frames, which can be taken advantage of by traders in the next couple of days. But looking at BTC from the higher time frames suggests that the bottom is not in yet.

Read full analysis