Chainlink (LINK) is likely to experience a significant price drop in the near future. according to A bearish warning from well-known technical analyst Crypto Yapper. The prediction hinges on whether a head-and-shoulders pattern, a technical indicator often seen as a harbinger of a price decline, forms on the weekly chart.
The head and shoulders pattern is characterized by three distinct peaks: a left shoulder, a head, and a right shoulder. The head marks a peak with two lower peaks on either side. For LINK, Crypto Yapper highlights a left shoulder forming near $17, a head forming at about $23, and a right shoulder peaking near $19. This symmetrical structure creates a bearish formation that signals a potential price pullback for the cryptocurrency.
The key element of the Head and Shoulders pattern is the neckline, which is a horizontal support level that is usually drawn around the price point where two lows are formed (between the Shoulders and the Head).
For LINK, this neckline reaches a critical point at $12. A break through this level would trigger a significant drop, potentially sending the price down to the $8 range. This prediction is consistent with the technical principle that when a neckline is broken, the asset often falls the same distance as the height between the head and the neckline.
Chainlink Bearish Signal
The price has been declining from its all-time high since March 2024, indicating continued selling pressure. Recent price volatility has further strengthened this bearish outlook. LINK recently broke through the key $12 support level and is currently trading at a shaky $11.74.
Moreover, daily technical indicators are also showing a similar picture. The 50-day and 100-day exponential moving averages (EMAs) are currently above LINK’s price at 13.68 and 14.45 respectively. This position indicates a bearish sentiment, suggesting that the coin is facing selling pressure and that the downward trend is dominant.
The Relative Strength Index (RSI) is approaching oversold territory (below 30) at 35.22. While not yet oversold, this reading suggests that Chainlink is approaching conditions for further declines before a price correction or bounce can occur.
The Awesome Oscillator (AO) is currently at -0.96, indicating negative momentum. This oscillator measures market momentum and its reading suggests that downward pressure is building. Similarly, the Chaikin Money Flow (CMF) is at -0.11, reflecting stronger selling pressure than buying interest.
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