Chainlink price struggles to hold $15 support, but a rising wedge screams danger with LINK at the risk of dropping to $13.
Published 7 hours ago
The crypto market’s post-Bitcoin ETF sell-off hangover lingers, but a sense of uneasy calm has settled in. Chainlink price, for one, seems to be testing investor’s patience, falling back from $16 to $15.
If a key technical pattern plays out, LINK could be in for a steeper dive. The 20 Exponential Moving Average (EMA) on the four-hour chart serves as the immediate support level, a flickering ember of hope for a bounce back toward $20. But stay frosty, traders – a break below could send Chainlink spiraling further.
Chainlink Price Prediction As Supply On Exchanges Shrinks
Insight from the Moving Average Convergence Divergence (MACD) indicator reveals that the bearish cloud could intensify in the coming sessions, considering the sell signal. This, coupled with the LINK’s potential slide below the 20 EMA could trigger a larger drawdown.
A rising wedge pattern in the four-hour range clouds Chainlink’s short-term performance. If validated, the Oracle token could go ahead and post an additional 12% dive to support at $13.
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The falling wedge is a platform known to trap bulls while launching bears. It emerges within an established uptrend but due to decreasing volumes, prices tend to consolidate while converging. It is this waning enthusiasm that hints at the underlying doubt in the upward momentum.
Traders should look out for a break below the lower trendline to confirm the signal. This breakout marks the beginning of a potential reversal and subsequently a downward move.
Short positions can be entered slightly below the breakout point, with traders aiming to benefit from the expected decline. Stop losses would be placed above the breakout point to help manage risk in case of an opposite action in the price.
In Chainlink’s case, a 12% target is anticipated — calculated by measuring the height of the falling wedge and extrapolating it downwards from the breakout point.
Note that confluence support created by the 50 EMA and the 200 EMA at $14.7 could save the bulls from the retracement. Accepting LINK back into the wedge could either prolong the consolidation or right way blast the token to $16 and $20.
A bullish outcome is highly likely according to insight from blockchain data analytics platform, Santiment. In their latest report, analysts at the company reckoned that LINK’s supply on exchanges has dropped below 15% for the first time in four years.
🔗📈 #Chainlink enjoyed a mini breakout this weekend, hitting $15.82 for the first time in 2 weeks. The supply of $LINK on exchanges is below 15% for the first time in ~4 years, and the amount of >0 coin wallets is within 6% of its #AllTimeHigh. https://t.co/IodNDKZl5q pic.twitter.com/OLTFxfuVlw
— Santiment (@santimentfeed) January 15, 2024
Shrinking balances on exchanges are often considered bullish signals. Holders prefer to keep their tokens out of exchange platforms when intending to HODL. This significantly reduces the potential selling pressure in addition to affirming investor confidence in the token.
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The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Source: https://coingape.com/markets/chainlink-price-on-the-edge-of-14-drawdown-if-this-key-pattern-validates/