As a seasoned analyst with over two decades of experience navigating the tumultuous waters of the crypto market, I must say that Chainlink’s current situation seems to be a familiar dance between bullish sentiment and underlying bearish fundamentals. The price surge, fueled by traders’ optimism, is indeed intriguing, but the lack of substantial on-chain activity gives me pause.
In the previous 24 hours, Chainlink’s price demonstrated resilience as the broader market experienced an uptick. Yet, technical indicators hint that Chainlink is trapped within a larger downward trend. Over the last day, Chainlink’s price ascended by approximately 3.6%, reaching $10.50. The query now lies in whether the prevailing optimistic market atmosphere will successfully reverse Chainlink’s current bearish phase.
Can Traders Sustain Chainlink Price Up?
The disparity between Chainlink price and on-chain metrics is concerning. While a deep analysis of LINK open interest (OI) and price relationship reveals bullish sentiment among traders, on-chain metrics speak a different story—one that is bearish.
The Crypto Derivatives Visualizer from Coinglass indicates that over the past 24 hours, the Open Interest (OI) of LINK rose by approximately 0.91%, and its price surged by around 3.88% within the same timeframe. When both the price and open interest increase, this typically means traders are buying Long positions, a sign that could be bullish for the asset’s future price movement.
Nevertheless, examining Chainlink’s true volume as reported by Messari Research suggests that the network is facing challenges. The on-chain volume for LINK dipped to a monthly minimum of $46.1 million in August, with a notable surge on the 5th, coinciding with a broader market crash.
As a seasoned trader with over a decade of experience in the crypto market, I have witnessed numerous trends and fluctuations that have shaped my understanding of this dynamic industry. Observing the current state of the market, it appears that both futures and spot traders are maintaining a steady upward price trend. However, from my perspective, there seems to be a noticeable lack of transactional activity on-chain, which raises concerns about potential stagnation.
LINK Price Analysis: Is a 47% Crash Avoidable?
The forecast for Chainlink’s price suggests that the asset is following a prolonged contraction pattern, called a Bear Pennant. This suggests that Chainlink might resume its downward trend once it completes its temporary consolidation phase.
If the Bear Pennant pattern continues as expected, LINK‘s value might find a stabilizing point near approximately $10.49. However, if it breaks below this level, the price could potentially fall towards support at around $9.00. Going further down, a potential long-term support level may be established around $5.50, given the estimated decline from the flagpole’s projected descent, which amounts to approximately 47% from the current value.
1. The Exponential Moving Averages (EMAs) are all trending lower and increasing in slope, which indicates a bearish market outlook. At the same time, Chainlink’s price is sitting below all these EMAs, further supporting the prevailing downward trend.
In simpler terms, the Stochastic RSI (Relative Strength Index) is showing that the asset could be experiencing a temporary decrease or even a continuation of its downward trend since it’s currently in an overbought state. The RSI line and Signal line are moving closer together, hinting at an imminent bearish cross, which may signal a decline in the asset’s price.
Should the price of LINK surpass $10.85, it might challenge or even disprove the Bear Pennant pattern and the underlying bearish argument. If this happens, LINK could then aim for the next significant resistance levels at $12.04 and potentially $14.50.
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2024-08-20 13:48