The past week has been rough for Chainlink. Even though its weekly losses of 8% may not be that steep as compared to some of its counterparts, its mid-long term trajectory continues to look bearish due to the lack of strong support levels. At the time of writing, LINK traded at $17.73, down by 1.8% over the last 24 hours.
Chainlink Daily Chart
Chainlink’s 50-SMA (yellow) crossed below its 200-SMA (green) during early July after a period 14 months. On the previous occasion, LINK was able to recover from its previous death cross in just a week as the broader market recouped its losses due to a Bitcoin recovery. However, this was not the case anymore.
The Bitcoin market has remained below its ATH for over two months and there are no clear signs of recovery just yet. Naturally, this worked against a bullish scenario for LINK as well, which was burdened by constant selling pressure at various price levels. A previous analysis mentioned a support zone between $17.3-18.3 and while LINK did trade within this area, prices were vulnerable to another decline.
Relative Strength Index has failed to rise above 50-55 since late May as downward pressure was yet to dissipate. While bulls did attempt to break this trend as prices gradually picked up post 22nd June, a rise above equilibrium was denied once again. The index could now move back to the oversold region before reversing trajectory, which would indicate further losses for LINK.
MACD was close to a bearish crossover, while its histogram noted declining bullish momentum. Some positives were presented by the On Balance Volume’s uptrend which suggested that buying pressure was slightly creeping up over the past few weeks. Nevertheless, this was not enough to indicate a swift market recovery.
22nd June swing low of $15 seemed to be LINK’s next destination over the course of next week. Failing to hold on to this last defensive resort could even thwart prices back towards the $13-mark, where the Visible Range’s POC resided. Meanwhile, traders could opt to short LINK at its press-time level and exit their trades at $15 to capitalize on the projected downturn.