Chainlink set to drop 25% towards rock bottom

Chainlink (LINK) price is on a rollercoaster move after a very choppy weekend where LINK price looked able to pair back some incurred losses from last week. Like your favorite ride in the theme park, LINK price has been trading a little bit higher, only to turn into a death ride that could make it drop as much as 25% before hitting bottom. The historic $5 level could come under pressure on this roller coaster.

LINK price set to turn into a death ride

Chainlink price is tanking over 3% on the day at the time of writing as the ASIA PAC session started on a negative tone that only got eked out further during the European session. After the already significant drop last week, another drop is announced as the monthly pivot, and the 55-day Simple Moving Average is now turning into a double cap that bears can use as a perfect entry-level to defend and manage price action from. With the bearish elements outweighing the bullish ones, expect to see a significant drop lower.

LINK price was rejected on Sunday against $7.18, where the monthly pivot and the 55-day SMA resides. With a flat top and sharp drop in the opening on Monday, the hand of the bears is shown, and it does not look that this will turn around quickly. Once the low of last week at $6.68 is broken, expect to see a further decline to $5.26, as there are no real handles in the way, with the monthly S1 not showing any significance in the past few weeks, and $5 at risk of being broken as global markets could undergo another phase in this global sell-off.

LINK/USD Daily chart

As the week progresses, this will prove to be a very significant week with the Fed Jackson Hole Symposium at the end of the week that could influence a potential market turnaround. Should some dovish comments come from that event, expect to see a broad and steep rally in all asset classes of the markets, with cryptocurrencies receiving the much-needed tailwinds to squeeze out bears and overcome the downturn. Price action in Chainlink would, in that case, pop back above the monthly pivot and test the green ascending trend line for reentry towards $9.50.