Share:
  • Chainlink price dropped nearly 7% in rough trading on Wednesday.
  • LINK sees bulls doubting that their Goldilocks rally is still viable.
  • Expect more pain in trading as more comments from central bank officials are about to communicate to the markets in the build-up toward February.

Chainlink (LINK) price is entering a crucial moment for its rally that started at the beginning of the year. In the first two weeks of 2023, only some light second-tier data came out and hardly any headwinds were present to challenge the rally. That is changing this week as the Bank of Japan was the first central bank to kick off 2023 and immediately halted the overall rally in cryptocurrencies. This was soon followed by very choppy trading on comments from European Central Bank and Federal Reserve members.

Chainlink price looks questionable for more upside

Chainlink price had a gruesome trading day as plenty of bulls will have lost quite a lot of money in Wednesday trading. The biggest reason for this sudden change in sentiment comes with the Bank of Japan providing a surprisingly unchanged monetary policy, while markets were certain that a policy change was imminent.

To make matters worse, traders got flunked for their assessment of the ECB as the French member Villeroy pushed back on the idea that the central bank would only hike interest rates by 25 basis points in February and then halt. The central bank official gave an opposite view of 50 basis points hikes continuing until at least the summer. If you ask me, the Goldilocks scenario looks almost dead and gone.

LINK, for now, has the monthly pivot still supporting near $6.25, as it did on Wednesday and the week before on Friday, January 13. The bearishness comes with the third rejection against the 200-day Simple Moving Average (SMA) and the 55-day SMA, which was tuned into support on Monday, January 16., and now could be acting as resistance again. Bulls are losing control, and once the monthly pivot breaks price action could tank toward $5.70 soon in an unwinding of the rally.

LINK/USD daily chart

LINK/USD daily chart

Upside potential for now would only come from the biggest central bank in the world: the US Federal Reserve. Should the Fed continue to build up expectations of smaller 25 basis point hikes in February and the months to come, the Goldilocks scenario for a soft landing would build more support. Although trading would remain choppy, buying the dips would see LINK break above $7.00 and possibly trade toward $8.50 by mid-February.


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.

Join Telegram

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended Content

Editors’ Picks

Charles Hoskinson and XRP community in loggerheads again, debate on Ethereum’s free pass resurfaces

Charles Hoskinson and XRP community in loggerheads again, debate on Ethereum’s free pass resurfaces

Charles Hoskinson, the founder of Cardano, engaged in a debate with the XRP community over the rumors of ConsenSys founder, Joseph Lubin, bribing the US financial regulator.

More Cardano News

Bitcoin Weekly Forecast: Analyzing potential $30k corrections ahead of BTC ETF approval

Bitcoin Weekly Forecast: Analyzing potential $30k corrections ahead of BTC ETF approval

Bitcoin (BTC) price has slowed down its 2023 bull rally as it approaches the $37,000 level. After three weeks of consolidating around this level, BTC shows no directional bias whatsoever.

More Bitcoin News

Solana likely to extend gains as DeFi airdrop season could boost user base

Solana likely to extend gains as DeFi airdrop season could boost user base

Solana ecosystem is set to experience a surge in activity from decentralized finance (DeFi) projects that offer users airdrops in the following months, according to a report from crypto market intelligence company Messari. 

More Solana News

LUNC ranks among trending tokens alongside Dollar pegged stablecoin USTC, eyes recovery

LUNC ranks among trending tokens alongside Dollar pegged stablecoin USTC, eyes recovery

Terra Classic USD and Terra Luna Classic tokens are trending among market participants after overnight price gains. USTC rallied to $0.078 local top after its 2022 collapse, garnering hope among traders. 

More Cryptocurrencies News

Analyzing potential $30k corrections ahead of BTC ETF approval

Analyzing potential $30k corrections ahead of BTC ETF approval

Bitcoin has slowed down its 2023 bull rally as it approaches the $37,000 level. After three weeks of consolidating around this level, BTC shows no directional bias whatsoever. Some investors speculate this could be an upward-sloping accumulation that leads to a $40,000 rally.

Read full analysis

BTC

ETH

XRP