ChainLink Defies Crypto Slump, Yet analysts Warn of Potential $6.60 Low

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The decentralized oracle network, ChainLink, and its native currency, LINK, have defied broader market trends, rallying amidst a generally bearish cryptocurrency environment. Even after a 16% price reduction over the preceding four weeks, LINK has rebounded strongly, registering a 5% rise to $13 in the last 24 hours. This recovery comes on the heels of last Friday’s six-month low of $11. Nevertheless, crypto expert Ali Martinez has detected some concerning signs.

Martinez took to social media recently to highlight a particular pattern on LINK’s daily chart. He discerned a conspicuous head-and-shoulders formation during LINK’s recent surge to $13, a distressing figure which he believes heralds a considerable price correction in the offing. He maintains that this pattern signifies a persistent downtrend until the so-called right shoulder is disjointed.

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In Martinez’s view, for this dire prediction to be circumvented, the ChainLink price would need to shatter the $20 ceiling, which denotes the vertex of the right shoulder.

This might not be an easy feat. If indeed the market obeys Martinez’s prediction, ChainLink could be hit with a staggering 45% correction. A fervent believer of his model, Martinez had previously indicated that such a correction could materialize if LINK dipped below the $12.70 mark.

Under such conditions, significant retraction in the token’s price could be expected, possibly plunging to an almost unthinkable low of $6.60. These are depths not seen since the third quarter of 2023, just before the broader market uptrend started in November of that same year.

A separate analysis by another crypto analyst, Crypto Ambrosio, reinforced similar pessimistic scenarios for ChainLink’s price tag. Ambrosio asserts that if the 20-week exponential moving average (EMA), represented by the yellow line in the chart, surpasses the current price, it would be a distinctive signal of more bearish times to come.

However, if LINK’s price can break above the pivotal $14.75 EMA line, this bleak outlook could be averted. Ambrosio has also noted an ongoing downtrend pattern in the Relative Strength Index (RSI), another arrow in the quiver of the bearish trend.

Nevertheless, if LINK can maintain its foothold at the $12 support level, the bearish trend could lose some momentum, Ambrosio notes, adding that a possible Falling Wedge pattern forming for ChainLink and a break above the $15 resistance could indicate a trend reversal. If this occurs, it could carve a path toward further price recoveries, pushing toward its yearly high of $22.89, reached in March.

However, for ChainLink to commence a potential price recovery while trading at $13.28, it must surpass several upper resistance levels. Inspecting the LINK/USD daily chart reveals that the token’s first significant hurdle lies at the $13.52 price level, which has been a stubborn obstacle for the last eight weeks. To dispel the bearish shadow and exceed the 20-week EMA, LINK’s price needs to cross, and more importantly, consolidate above the $14.38 resistance level.