Chainlink Technical Analysis: LINK squabbles under heavy selling pressure, downswing targets $16


  • LINK/USD is on the verge of a breakdown amid the formation of a rising wedge pattern.
  • Chainlink whales are offloading their tokens after the price hit a new all-time high, adding to the selling pressure.

Chainlink is up 10% in the last 24 hours and a whopping 52% in the previous seven days. After breaking above $20, LINK soared to a new record high at near $24. Meanwhile, the uptrend seems to have hit the ultimate point, as selling pressure finds its way back into the market.

Chainlink's correction from a new record high in the offing

At the time of writing, LINK is trading at $22.2. This follows a correction from the all-time high. Support at $22 must remain intact to avert potential losses. However, selling pressure is likely to continue building, especially with the formation of a rising wedge pattern.

Chainlink is exchanging hands at the pattern's apex, suggesting that a reversal is in the offing. The bearish outlook comes into when an asset's price ascends with pivot highs and lows. Trendlines drawn along the peaks and lows converge at a single point referred to as the apex.

A breakdown usually occurs before the trendlines meet. The distinctive breakdown is mostly confirmed by decreasing volume (highlighting a divergence between volume and price). These breakdowns are typically fast and drastic and must be caught at the right time to ensure traders benefit greatly.

LINK/USD 4-hour chart

LINK/USD 4-hour chart

Santiment's holder distribution chart shows that the selling pressure above Chainlink intensified dramatically over the past week. The behavioral analytics firm recorded a significant spike in the number of addresses with millions of dollars in LINK, colloquially known as "whales."

The number of addresses holding between 10,000 and 100,000 LINK dropped significantly from 2,880, recorded on January 8 to 2,851 at the time of writing. Simultaneously, the number of whales having between 1 million and 10 million LINK fell from 55 to 51 in the same period.

At first glance, the recent decrease in the number of large investors behind LINK may seem insignificant. However, when considering that these whales move huge Chainlink volumes, the sudden spike in selling pressure can translate into a downward price action to $16.

Chainlink holder distribution

Chainlink holder distribution

It is worth mentioning that the bearish outlook will be abandoned if Chainlink holds support at $22. Rebound to the all-time high could also validate a spike toward $30. Note that the price is trading above all the three moving averages on the 4-hour chart. Thus the odds are somehow still in favor of the bulls.

 

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

Bitcoin Price Prediction: BTC set to retest $56,000

Bitcoin price is heading lower following a break below a critical support trend line. The leading cryptocurrency is now exposed to a downside target of $56,568. The BTC IOMAP model suggests that the bellwether cryptocurrency is unlikely to drop below $56,000.

More Bitcoin news

Chainlink price faces minor sell-off before resuming uptrend

Chainlink price is witnessing its uptrend retreat following a technical signal that indicates the token has reached its local top. LINK is headed lower to retest critical support levels as the bears target $28.61 next. The token may fall toward the lower boundary of ...

More ChainLink news

SafeMoon price prepares to escape from prevailing downtrend with 60% ascent

SafeMoon has been locked in a downtrend since May 23, with little ambition to reverse the period of sluggish performance. While it's trapped in the prevailing consolidation chart pattern, an escape above $0.00000288 could spell trouble for the bears.

More SafeMoon news

XRP price on the cusp of massive decline if this critical support level fails to hold

XRP price is trapped within a recent downtrend as the momentum has flipped to the downside. Ripple lagged behind while other cryptocurrencies, including Bitcoin and Ethereum, recently witnessed rallies reaching new all-time highs. 

More Ripple news

BEST CRYPTO BROKERS/EXCHANGES




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

BTC

ETH

XRP