Chainlink (LINK), a prominent player in the decentralized oracle network space, has faced headwinds recently. Its price has been gravitating towards crucial support levels, raising concerns among investors. While a brief attempt at stabilization emerged, broader market uncertainties have prevented a significant bullish resurgence.
LINK Stalled By Resistance, Bears Remain Active
At the time of writing (August 15, 2024), LINK is trading around $10.30, reflecting a cautious market. The daily chart paints a concerning picture. LINK has been trapped in a downward channel for several months. Although a breakout occurred, bulls were unable to propel the price above the crucial 200-day EMA (Exponential Moving Average), currently at $14.25. This failed attempt, coupled with a fall below the 20-day EMA ($11.27), has intensified bearish sentiment. The 50-day EMA ($12.52) also presents a formidable barrier for any potential bullish reversal.
Technical Indicators Hint at Downtrend Continuation
Technical indicators on the daily timeframe add weight to the bearish narrative. The MACD (Moving Average Convergence Divergence) indicator exhibits bearish momentum, with the MACD line dipping below the signal line. While the histogram suggests a slight easing of bearish pressure, it also implies limited upside potential in the short term.
Immediate support for LINK lies at $9.44. A breach below this level could trigger a further price drop, with the next support zone around $8.00. On the flip side, if the bulls can muster the strength to push the price above the 20-day EMA ($11.27), a short-term rally towards $12.25 and $12.87 resistance levels could be on the cards.
Derivatives Data Paints a Mixed Picture
Analysis of derivatives data from Coinglass reveals a 15.88% decrease in trading volume. Conversely, Open Interest has witnessed a slight increase of 2.61% to $136.05 million. The 24-hour long/short ratio across exchanges hovers near neutrality at 0.9826. However, a closer look at individual platforms like Binance and OKX suggests a higher long bias. This paints a picture of mixed sentiment among traders, with some cautiously optimistic about a potential breakout.
The combination of declining trading volumes and rising Open Interest suggests that traders are hesitant to commit fully in either direction. LINK is currently perched precariously near support levels. A successful defense of this zone could pave the way for a short-term recovery. However, a break below $9.44 could exacerbate the downtrend. With the broader market sentiment still uncertain, the next move for LINK hinges on a decisive breakout in either direction. Investors are advised to closely monitor key technical indicators and price movements to make informed 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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