The ChainLink (LINK) price has been decreasing alongside a descending resistance line since its Aug 16 all-time high.
Unless the price is successful in breaking out above this resistance, the price movement is still considered corrective.
LINK Breaks Down from Bullish Pattern
The LINK price has been decreasing since Aug 16, when it reached a high of $20.11.
While the price seemingly began an upward move on Aug 21, it reached a top shortly after with a high of $17.77. This created a lower-high and a descending resistance line that the price has been trading under since.
LINK has been recently trading between support and resistance at $10 and $13.30, respectively. The horizontal resistance has been validated multiple times, as can be seen in the multiple wicks on the daily chart.
Due to the breakdown from a bullish pattern, it would be more likely for the price to retrace all the way to the $10 support area outlined in the previous section.
Technical indicators in the daily time-frame do not yet show any signs of a reversal. The MACD, Stochastic Oscillator, and the RSI are decreasing, the latter failing to even reach the 50-line.
These are signs that further support the theory that LINK will reach the $10 support area.
Since the aforementioned $20.11 high, the LINK price has been correcting, having possibly completed an A-B-C formation (in black below). However, it is not yet clear if the formation is a part of a larger A wave of a correction, or if the price has completed the entire correction and has now begun an upward move.
Until the price breaks the descending resistance line connecting the beginning of the correction and the top of the B wave, we cannot state that the price has begun an upward trend. This belief is strengthened by the bearishness from technical indicators.
To conclude, the LINK price is expected to continue to decrease towards $10, and it’s possible that the correction is not yet complete.
What do you think we will see in the coming week / month? Do you agree with the above analysis? Also If you like this content, consider tipping the article / following me, so more people see this content and we get a nice discussion going on.
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Until next time, stay classy crypto world!
Chainlink (LINK) is a decentralized oracle service, which aims to connect smart contracts with data from the real world. Since blockchains cannot access data outside their network, oracles are needed to function as data feeds in smart contracts. Oracles provide external data (e.g. temperature, weather) that trigger smart contract executions upon the fulfillment of pre-defined conditions. Participants on the Chainlink network are incentivized (through rewards) to provide smart contracts with access to external data feeds. Should users desire access to off-chain data, they can submit a requesting contract to ChainLink’s network. These contracts will match the requesting contract with the appropriate oracles. The contracts include a reputation contract, an order-matching contract, and an aggregating contract. The aggregating contract gathers data of the selected oracles to find the most accurate result. Website : https://chain.link/