Source : ambcrypto.com
Since striking its ATH a year ago, Chainlink (LINK) bears have made a visible effort to find fresher lows. The lower peaks coupled with even lower troughs helped the sellers pierce through the 15-month trendline support (now resistance).
An extended selling vigor can now drag LINK to retest its $6.5-support before the bears give a leeway to the buyers. At press time, LINK traded at $7.37.
LINK Daily Chart
Despite upholding the $12-mark for over 16 months, the bulls failed to defend this level after the bears made the most of the fear sentiment and provoked liquidations. Without a surprise, it became viable for them to pull off a nearly 60% drop from the $12.6-level. In this bloodbath, LINK took a plunge toward its 22-month low on 12 May.
The current price was slightly overstretched from the alt’s 20 SMA (red) and 50 SMA (cyan). Also, the gap between the 20 EMA and 50 EMA has significantly risen to display a one-sided bear dominance. Historically, the buyers have bridged the overextended gap between the 20/50 EMA by propelling short-term rallies.
The Relative Strength Index failed to show a strong revival after undertaking a bearish divergence with price. An undesired fall below the 30-mark could lead to a much-needed recovery from the oversold region.
After peaking at its record high, the -DI line showed some slowing signs. Keeping in mind its past tendencies, it could head south and thus lead to an ease in the selling pressure.
Taking cognizance of the one-sided bearish dominance revealed by the indicators, a continued fall could see testing grounds at the $6.5-level. With the overstretched readings on its Moving averages, RSI and DMI, the buyers would be keen to show up in the $6.5-$7 zone. In which case, they would mount on buying volumes to snap the $8-level in the coming sessions.
Even so, an overall market sentiment analysis becomes vital to complement the technical factors to make a profitable move.