The Chainlink (LINK) Price Correction
The price of Chainlink (LINK) has experienced a decrease since reaching its yearly high of $17.30 on December 9. This marks the first sign of weakness for LINK after breaking out from a long-term descending resistance trend line. The question now is whether LINK can recover before the end of the year.
Chainlink Creates Bearish Engulfing Candlestick
In June, the price of LINK was at a low of $4.90 and began to increase, with acceleration in September. The price then broke out from a long-term descending resistance trend line that had been in place for almost 900 days. Two weeks ago, LINK reached a new yearly high but has since fallen, creating a bearish engulfing candlestick last week. This candlestick is significant as it indicates a reversal in the upward trend.
The decrease also confirmed a long-term horizontal resistance area.
RSI Indicator Shows Weakness
When evaluating market conditions, traders use the Relative Strength Index (RSI) as a momentum indicator. A reading above 50 with an upward trend suggests bullishness, while a reading below 50 indicates bearishness. The RSI for LINK is falling and has generated bearish divergence, indicating weakness in the price.
LINK Price Prediction: Is the Bottom In?
According to technical analysts who utilize the Elliott Wave theory, the most likely wave count for LINK suggests that it completed a five-wave upward movement that started in June. The bearish divergence observed in November further supports the completion of this upward movement.
Crypto Traders Remain Bullish
Despite the recent price weakness, some traders remain optimistic about LINK’s long-term trend. The CryptoBull tweeted a bullish statement, advising emotional investors to set a sell order at $250 and come back in 1-2 years. Steve also believes in the upward trend, citing the Grayscale Chainlink Trust.
Price Targets for Potential Correction
If the Elliott Wave count is correct, LINK has entered an A-B-C corrective structure. The first potential target for the bottom of this movement is at $12.50, while the second target is at $11.05. These levels are determined by Fibonacci retracement support levels.
LINK’s Upward Potential
Despite the short-term bearish prediction, if LINK surpasses its yearly high of $17.30, it could continue its upward movement and potentially reach the next resistance level at $20, representing a nearly 40% increase.
Hot Take: LINK Faces Short-Term Weakness but Long-Term Bullish Outlook Remains
The recent decrease in the price of Chainlink (LINK) may be a cause for concern in the short term. However, technical indicators such as the bearish engulfing candlestick and falling RSI suggest weakness in the current trend. Nevertheless, some traders maintain a bullish outlook for LINK’s long-term performance, citing factors such as the Grayscale Chainlink Trust. It remains to be seen whether LINK can regain its footing and continue its upward movement before the end of the year. Traders should closely monitor key levels and market conditions to make informed decisions about their investments in LINK.
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