LINK Buying Opportunity As Bearish Cues Predict 60% Drop

PATNA (CoinChapter.com)— Chainlink’s token LINK has some bullish cues lined up that could make your ex come running back into your life, but the short-term outlook for the token seems bearish.

According to CoinShares’ Digital Asset Fund Flows report, the Chainlink token’s investment vehicles enjoyed excellent inflows in 2024, behind only Bitcoin and some mixed token funds. The report indicates that Chainlink repeatedly caught investors’ attention, likely due to its partnerships and updates.

LINK price has been on a bullish rally since May 15, spiking nearly 36% to reach a daily high near $17.45 on May 21 before profit booking pared some of the token’s gains. The Chainlink token price again went into a tizzy on May 24, spiking nearly 8% to reach a daily high near $17.8 before paring gains.

LINK Price To Retest Channel Support

LINK has been in an uptrend since mid-June 2023, peaking around March 2024, and has now entered a consolidation phase within the $15 to $18 range. Despite this stability, indicators point to a possible short-term decline.

The Chainlink token has been moving inside a parallel channel pattern, with LINK prices currently trying to break above the channel’s resistance.

Fibonacci retracement levels highlight potential reversal points. LINK tested the 0.5 Fibonacci level near $13 and bounced back, suggesting this as a support zone. Resistance at the 0.236 level ($17.2) and near $20.5 could limit upward movement.

The immediate outlook remains cautious due to resistance from the channel’s resistance, which could force the token to test the support near $13, which would pare more than 24% of LINK’s gains.

The Relative Strength Index (RSI) hovers around 70, though it is currently neutral, with a score of 65.4 on the daily charts. An RSI above 70 suggests overbought conditions and precedes a price correction, which implies a short-term pullback.

Given these indicators, LINK might move downward toward the $13 price level. The red arrow on the chart also indicates a possible decline. This pullback could extend to the $12.9982 level (Fibonacci 0.5) if bearish pressure persists.

Though ChainLink’s long-term trend remains bullish, the short-term outlook appears bearish.

LINK Price Paints Bearish Pattern

Meanwhile, another bearish risk for LINK price comes from the technical pattern called the ‘descending triangle.’

Market analysts predominantly consider the descending triangle a bearish continuation signal.

The configuration features a downward-sloping upper trendline, which gradually reduces the price action’s highs, and a flat lower trendline, which is a consistent support level the price finds difficult to break.

Moreover, the pattern suggests that selling pressure is intensifying and consistently overpowering the buyers, leading to successively weaker rallies. In this setup, the potential price target is typically gauged by the maximum height of the triangle at its widest point.

Hence, confirming the bearish pattern might result in the Chainlink token dropping over 60% to reach the projected price target near $6.9.

The bullish cues favoring LINK price could help the token in the long run, but the short-term bearish risks could present a buying opportunity for LINK traders.

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