The LINK downtrend could bring more lows for the cryptocurrency despite the recent record-breaking rebound that closed an intraday rally with more than 30% gains on the day. The recovery led the price higher but has since turned around at the top of the downtrend channel which was holding so far as we are reading today in our chainlink news.
The LINK downtrend could lead the cryptocurrency lower according to the latest factors visible on the charts. Last week, after hitting new lows, Chainlink rebounded from less than back up to over at the local high.
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The 30% surge broke records for the greenest day of the year where this particular asset was unstoppable. The year started off with the cryptocurrency setting fresh highs but it then collapsed during the Black Thursday crash to almost a zero.
The bounce from the lows sent Chainlink on a journey to the price discovery mode and eventually hit $20 per token. From that peak, however, the downtrend channel has formed and the recent rally didn’t help. The failure to break out from the downtrend could really lead to new local lows. The downtrend channels are subjective tools but the technical indicators are more precise as they have little room for interpretation and user error. These tools suggest that Chainlink is ready to go lower.
According to the Bollinger Bands, the volatility measuring tool of a moving average and the two standard deviations, LINK got rejected from the mid-BB and these kinds of rejections often are followed by the move to retest a lower band. Reclaiming the middle line will only suggest the opposite and will send LINK to the top of the band. The Bollinger Bands are not the only indicator that backs up this idea of a downtrend channel as the Ichimoku Indicator painted a bearish picture too. The chikou span traces back about 26 trading sessions and helps plot resistances and support levels. The chikou span looks back however, the cloud looks ahead. It is twisted bearish which suggests a bearish future price action.
The kijun-sen is above the tankan-sen line which signals a bearish price action and Chainlink is in the process of being pushed down even more by the kijun-sen. Using the Ichimoku indicator to find potential levels of support lower than these before, points to a target at $6.
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