- Chainlink price rallied 25% between September 11 and 23 to create a local top at $7.235.
- The rally that originated due to the bullish divergence is at an end and hints at a reversal.
- Investors can expect LINK bears to trigger an 8% descent from the current position.
- The correction could undo the 25% gains in total and sweep sell-side liquidity below $5.370.
Chainlink price shows an exhaustion of the bullish momentum as it approaches a key reversal zone. This development could see LINK trigger a steep correction that could undo recent gains.
Also read: Chainlink price at cross roads after a 20% climb
Chainlink price ready slide lower
Chainlink price set up a range, extending from $7.919 to $5.600 as it shed 29% between August 9 and 17. After this steep correction, LINK formed a base around $5.370 and also developed a bullish divergence with the Relative Strength Index (RSI) and Awesome Oscillator (AO).
This technical setup is when the asset produces lower lows while the momentum indicators produce a higher high. A breakout from this formation often leads to a bullish breakout. In Chainlink’s case, LINK rallied 25% between September 11 and 23. This rally was in response to the sudden sell-off noted in the second week of August.
The 62%, 70.5% and 79% are key reversal levels, where pullbacks are often hammered, leading to a continuation of the original trend. In this case, Chainlink price came close to retesting the 70.5% retracement level at $7.235, which could result in an exhaustion of the ongoing uptrend.
As Chainlink price trades around $7, investors can expect a retracement to the midpoint at $6.759. While bulls might find a temporary respite here, a retest of the 25-day and 30-day Exponential Moving Averages (EMAs) confluence at $6.450 is more than likely. This move would constitute an 8% descent from the current position.
In a highly bearish scenario, Chainlink price could wipe the 25% gains and revisit the $5.370 support level. Resting below this barrier is sell-side liquidity, which is likely to be target by bears.
LINK/USDT 1-day chart
On the other hand, if Chainlink price manages to hold above the 50% retracement level at $6.759, it would indicate the presence of buyers. If bulls trigger a push above the $7.919 level and flip it into a support barrier, it would invalidate the bearish outlook.
In such a case, Chainlink price could then eye for a retest of the $8.449 hurdle.
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.
Recommended Content
Editors’ Picks
Bitcoin Cash could become a Cardano partnerchain as 66% of 11.3K voters say “Aye”
Cardano founder Charles Hoskinson proposed integration of Bitcoin Cash into a Cardano Partnerchain. 65% of 11,340 voters voted in favor of, to the contrary “No”, meaning “Ayes” have it, but this is pending confirmation.
Render Price Prediction: RNDR could hit $10 after successful breakout with ecosystem’s LD token launchpad
Render (RNDR) price is trading with a bullish bias, boasting higher highs, with the AI crypto coin not only outperforming its sector peers, but also doing better than most altcoins in the broader cryptocurrency space.
Tesla updates payment methods to include DOGE, Dogecoin price rises 6%
Tesla Inc., Elon Musk’s American multinational automotive and clean energy company headquartered in Austin, Texas, is the latest catalyst for Dogecoin (DOGE) price rally.
Sui daily transactions reach 41 million, overtakes Solana with SUI price primed for recovery
Sui (SUI) price has dipped 3 % in the past 24 hours and remains down 15% in the last week. However, other metrics suggest something could be at play in the Sui ecosystem as daily transactions skyrocket.
Bitcoin: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.