• Chainlink price triggers a bear flag pattern on July 8 that yields a 14% decline as of today’s low.
  • LINK 14-day Average True Range (ATR) indicator now at the lowest level since the beginning of 2021.
  • The May 23 and June 22 lows combine to provide substantial support if the decline continues.

Chainlink price has been in a steep dive since the May high, intervened by a brief spike from the May 23 low. The renewal of the downtrend following the breakdown from the bear flag pattern positions LINK for lower prices. Still, outstanding support at $15.00 and interference from ebbing bearish intent will determine the magnitude of the decline moving forward.

Chainlink price direction remains under the control of the bears, for now

The Average True Range (ATR) is not a directional indicator but a volatility indicator that conveys the magnitude of interest in a price move. Impulsive moves, up or down, are frequently accompanied by large ranges or large True Ranges. Corrective moves usually equate into relatively narrow ranges, implying a waning enthusiasm underpinning a price move or breakout. Thus, a bullish reversal with a jump in ATR demonstrates emotion and commitment, thereby raising the profile of the price action. Meanwhile, a bearish reversal with an increase in ATR reveals a stampede for the exits and confirms the move.

In the case of Chainlink price, the 14-day ATR has been trending lower since the milestone high following the May collapse, showing a gradual decline in the bearish sentiment behind the weaker price. In fact, the LINK ATR reading is at the same level as the beginning of 2021 and raises the probability of at least marginal rebound in the coming days or weeks.

Nevertheless, the guiding price structure for LINK is the decline from the bear flag pattern with two measured move price targets. The first is the pattern trough at $15.00, yielding a 20% dip, or $10.89, representing a 40% decline from the pattern entry price. The 40% move is measured from the flag’s trough to high.

Chainlink price can avert the mentioned scenarios with a daily close above $19.00. It would position LINK for a test of the declining 50-day simple moving average (SMA) at $22.34 where the weight of the bearish Death Cross pattern, triggered on June 30, should freeze the rally and introduce some form of consolidation. Even so, it will reward LINK speculators with an 18% gain from $19.00.

LINK/USD daily chart

LINK/USD daily chart

Suppose Chainlink price becomes inspired by a more robust cryptocurrency complex. In that case, it may overcome the 50-day SMA and target the flattening 200-day SMA at $27.40. Still, it would need to be complemented by a spike in LINK volume to achieve the sustainability necessary to climb another five points.

The notable compression in volatility exemplified by the falling 14-day ATR argues that the bearish intensity driving the correction is abating. As a result, Chainlink price could be easily motivated to reverse the current decline from the bear flag pattern. However, until LINK can recover $19.00 on a daily closing basis, the digital asset is directed by the bearish tone established by the prevailing pattern.

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

Latest Crypto News

Latest Crypto News & Analysis

Editors’ Picks

Shiba Inu enters 96% bull run as whales continue accumulating SHIB

Ethereum whale bought $11.5 million worth of SHIB tokens on Tuesday. Shiba Inu token has reached 783,739 holders, large wallet investors accumulate SHIB tokens through the dip. SHIB was briefly the cryptocurrency with the largest turnover on exchanges Binance and Coinbase on Monday.

More Shiba Inu News

Three reasons why MATIC price will breakout to a new all-time high at $4.5

MATIC price breached a crucial resistance level that has prevented it from rallying four times over the past four months. The recent attempt seems to have an extra oomph behind it, hinting that this run-up could trigger a massive move.

More Polygon News

XLM price eyes 55% breakout if Stellar bulls can flip one crucial barrier

XLM price has been stuck trading under a crucial blockade for nearly five months. The situation is set to change soon, however, as Stellar coils up for an explosive breakout.

More Stellar Lumens News

Terra's Do Kwon files lawsuit against SEC while analysts turn bullish on LUNA

Do Kwon, Terraform Labs CEO, was served a subpoena by the SEC while appearing at Messari's Mainnet conference. According to Do Kwon and Terraform Labs' lawsuit against the SEC, the regulatory agency lacks jurisdiction over the plaintiffs. 

More Terra News


Bitcoin Weekly Forecast: Markets revert to mean, but BTC price remains indecisive

Bitcoin price shows considerable strength after springing from the recent crashes. Still, it is uncertain whether the current bullish impulse will morph into a new uptrend or lead to a more profound decline.

Read the weekly forecast