Chainlink price analysis: Is $5 the bottom?
Chainlink could remain weak in the near term
Chainlink’s LINK token has been in the news for the past few days following the announcement of listing on Robinhood. Although the news generated interest among the bulls, they could not sustain the rebound. The bears are attempting to sustain the price below $6 as of 30 June 2022.
On-chain analytics firm Santiment recently highlighted that 80.8 million LINK tokens were moved on June 28, which is a five-year record.
Earlier in the month, the decentralised blockchain oracle network released its updated roadmap for the implementation of staking. Chainlink said in a blog post that staking was “built around four long-term goals” of increasing the cryptoeconomic security and user assurance of Chainlink services, increasing community participation in the network, generating sustainable rewards, and empowering node operators to access higher-value jobs by staking. The initial implementation is expected to happen in the second half of 2022, marking the start of Chainlink Economics 2.0.
Could the positive fundamental developments attract buyers at lower levels? Could Chainlink go up? Read the LINK price analysis to find out.
Chainlink price technical analysis: Weekly chart
LINK’s price has been consolidating in a downtrend. The failure of the bulls to achieve and sustain a strong rebound suggests that demand dries up at higher levels. Both moving averages are sloping down and the relative strength index (RSI) is near the oversold territory, indicating that bears are in control.
The sellers will attempt to sink and sustain the price below the critical support of $5. If that happens, the LINK/USD pair could start the next leg of the downtrend. The pair could then slip to $3.80.
Contrary to this assumption, if the price rebounds off the support, it will suggest that buyers are accumulating at lower levels. The bulls will then attempt to push the price to the 20-week exponential moving average (EMA) where the bears may again mount a strong defence.
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Chainlink price technical analysis: Daily chart
LINK’s price pushed the price above the 50-day simple moving average (SMA) on 9June but the bulls could not sustain the recovery. Strong selling pulled the price back below the moving averages on June 11.
The buyers again attempted a relief rally which hit a wall at the 50-day SMA on 24 June. This suggests that the bears are defending the 50-day SMA with all their might. The sellers will attempt to sink the price below the support at $5.28 and resume the downtrend.
However, a minor positive in favour of the buyers is that the RSI has formed a positive divergence. This indicates that the bearish momentum may be weakening.
If the price rebounds off the current level or the support at $5.28, the buyers will make another attempt to clear the hurdle at the 50-day SMA. If they manage to do that, the pair could rise to $8 and then to $10. A break and close above this level will be the first sign of a potential change in trend.
Chainlink: Buy or sell this week?
The sellers are attempting to sink the price below the strong support of $5.28. If they succeed, the bearish momentum could pick up and the pair could drop to $3.80. Chainlink’s price analysis shows that the bulls may gain the upper hand on a break and close above the 50-day SMA. That could open the doors for a rally to $8 and then $10.
The views and opinions expressed in the article are those of the author and do not constitute trading advice. Trading and investing involve substantial risks and you should do your own research or contact your financial adviser before arriving at a decision.