Chainlink set to descend past $7, here’s why

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

• The price action showed Chainlink prices were likely to sink beneath the $7 level soon.
• A Bitcoin recovery or a Chainlink move above $7.7 could be the first step in shifting sentiment in favor of the bulls.

Chainlink [LINK] has traded within the $6-$9 from May 2022. While this represented an accumulation phase on the higher timeframe charts, it was not encouraging on the lower timeframes for buyers.

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How much are 1, 10, or 100 LINK worth today?

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Yet, traders can still find opportunities to profit from price movements. Bitcoin [BTC] showed weakness over the past three weeks. Chainlink could fall lower too, following wider market sentiment.

Chainlink bears remain in control, which could drive prices toward $6.45

The market structure was bearish on the daily timeframe after LINK forayed below the $7.27 level on 1 August. Since then, this level has been breached and LINK has flipped its bias bearishly on the 1-day chart.

The 4-hour has had a bearish outlook since the failure to reclaim the $8 resistance level on 27 July. The rejection there was followed by steady losses. This downward trajectory of Chainlink prices was likely to continue based on the evidence at hand.

The RSI showed steady bearish momentum, and the OBV continued to slide lower in recent weeks. The price action showed that the next level of interest was the $6.45 mark. Demand was likely to be seen upon a retest of this zone, and LINK could have a minor bullish reaction or even a reversal.

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Realistic or not, here’s LINK’s market cap in BTC terms

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Selling pressure continued to stay dominant and was likely to push LINK prices lower

The data from Coinalyze showed that the short-term Chainlink market was in the firm grip of the bears. The Open Interest was falling slowly in the past 24 hours alongside the price, showing discouraged longs. The spot CVD was also in decline. Overall, the short-term sentiment was strongly bearish.

Apart from $6.45, the psychological level at $7 has also been important in the past month. Therefore, traders can keep an eye on these levels. A strong move below $7 in the coming week could present a shorting opportunity.