Chainlink (LINK) has recently been caught in a bearish pennant pattern, signaling potential for further declines. Despite this, recent developments suggest a mixed outlook for the cryptocurrency.
Bearish Technical Indicators
Technical analysis for Chainlink reveals persistent seller pressure. After a notable decline on August 5th, the token managed a brief bounce to $10.8, but this recovery was short-lived. Sellers have maintained dominance throughout August, as indicated by the Chaikin Money Flow (CMF), which remains below -0.05, highlighting significant capital outflow.
The daily Relative Strength Index (RSI) also reflects bearish sentiment. LINK’s RSI has remained subdued since it fell below the former range lows at $12.7. This has shifted focus to potential bearish targets, with local lows at $9.45 and $8 emerging as key levels to watch.
Resistance is expected in the $10.8-$11.2 zone. Short-sellers might find opportunities in this range, with further declines potentially pushing LINK towards the Fibonacci extension level of $6.4, particularly if the token breaches the recent low of $8.08.
Short-Term Fluctuations
In recent days, LINK experienced a minor recovery, with its Open Interest rising from $10 to $10.4, a 4% increase. This move was accompanied by a slight uptick in the spot Cumulative Volume Delta (CVD). However, this brief bullish sentiment quickly dissipated. The past 24 hours have seen Chainlink struggle to maintain momentum, facing rejection at $10.4 and witnessing a sharp decline in Open Interest, signaling a bearish shift.
The spot CVD also decreased, reflecting diminishing buying pressure. Additionally, the Funding Rate has oscillated between positive and negative values, indicating a market grappling with fluctuating sentiment.
Expansion and Adoption – A Glimmer of Hope
Amid these technical challenges, Chainlink has made strides in its ecosystem. The integration of four of its services across 12 blockchain networks marks a significant expansion and adoption milestone. This broader integration could provide a long-term boost for investors who are willing to look beyond the current bearish trends.
Also Read: Chainlink (LINK) Holds Strong At $9.65: RSI Suggests Bullish Turn As Exchange Outflows Rise
Chainlink’s efforts to expand its network capabilities signal growth potential, even if short-term trading conditions remain challenging. For investors with a longer time horizon, this expansion might be a positive indicator of future stability and increased utility.
Chainlink’s current market behavior reflects a bearish outlook in the short term, with technical indicators pointing to potential further declines. However, the recent expansion and integration efforts offer a promising glimpse into the token’s longer-term potential. As always, investors should stay informed and consider both short-term trends and long-term developments when making investment decisions.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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