By Franklin Smith
Chainlink bears have been discovering new lows since the alternative token struck its all-time high one year ago. The lower highs, plus even lower troughs, bolstered sellers’ move beneath the 15-month trend-line support (resistance at the moment).
For now, amplified selling strength might drag LINK lower to retest the support at $6.5 before buyers step up. Chainlink traded around $7.37 at this publication.
Chainlink Daily Chart
Though the altcoin defended the $12 level for more than 16 months, bulls could not protect the regions after bears catalyzed enormous fear sentiment that provoked liquidations.
As expected, bearishness saw LINK losing approximately 60% from $12.6. The bloodbath saw Chainlink dropping towards 22-month lows on May 12.
The current prices appear briefly overstretched from the token’s 20 Simple Moving Average and 50 Simple Moving Average.
Moreover, the distance between the EMA20 and EMA50 saw a substantial expansion, reflecting a 1-sided dominance by bears. Historically, buyers have propelled near-term rallies to bridge the overextended distance between the 20 and 50 EMAs.
Reasoning
The Relative Strength Index (RSI) could not present a massive reversal following a bearish divergence with Chainlink price. An undesired drop beneath 30 might ensure the much-anticipated revival from the oversold territory.
The –DI presented slowing signals after hitting its record peaks. Previous tendencies suggest the line might head south, easing the selling momentum.
Final Thought
Considering the 1-sided dominance by bears as indicators show, LINK might witness continued declines to hit $6.5 as its testing grounds.
As the DMI, Relative Strength Index, and Moving Averages exhibit overstretched conditions, buyers would be attentive to step up at the $6.5 – $7 range. That can catalyze increased buying momentum to overcome the $8 mark in the upcoming sessions.
Nevertheless, Chainlink enthusiasts should watch broad market sentiment to complement the technical factors for profitable moves. The crypto space saw bullish reactions overnight. Bitcoin climbed to reclaim the $30,000.
While publishing this post, Bitcoin traded at $30,33718, following a slight 0.02% gain over the previous day. Also, the global cryptocurrency market cap gained 0.38% at the same time frame to $1.30 trillion.
Stay tuned for upcoming crypto news.