Chainlink aka Link is a middleware that acts as a decentralized oracle network with the functional objective being, bridging two environments, on-chain and off-chain, through the use of APIs. The token has gained some popularity among its community members and is staunch believers of the coin. While this is good, some believe it might be the makings of the next XRP community.
At the time of writing, Link was at $1.9 and had a market cap of $656 million and a 24-hour trading volume of $371 million. With the formation of a descending triangle, the odds of a bearish breakout is more favoured for Link in the upcoming week.
Source: Trading View.
The one hour chart showed that Chainlink is forming a descending bearish triangle pattern. At the time of writing, however, the price bounced from the top of the pattern and was returning to the bottom end. From where the price was at the time of writing ($1.9), there is still a 10% room for the price to head lower.
This would put the price of Link at $1.65 and a further drop from here would be disastrous for Link and its investors; as the next drop would take the price to $1.507, which is 8.87% from the bottom of the pattern or 19% from the current price.
A similar drop occurred on March 16, when the price dipped as low as $1.58. With the MACD indicator creating more histograms below the zero-line, the bearish breakout becomes more favourable. Further dip by the red histogram would make the bearish scenario come true.
There is a chance that the breakout might go the other way considering the volatility and the uncertain market sentiment. If this were to be the case, Link would face strong resistance at $2.094, a 10% surge from the current price level.
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