TLDR
- Chainlink (LINK) price is currently consolidating around $10.37
- Technical analysis suggests a potential 18% drop to the $8-$9 range
- Whales are placing large buy orders between $8 and $9
- The RSI indicator signals a possible market rebound
- LINK balances on exchanges are declining, which could indicate an upcoming price reversal
The cryptocurrency market is currently experiencing heightened volatility, and Chainlink (LINK) is no exception. As of August 16, 2024, LINK’s price hovers around $10.37, having dropped 1.8% in the last 24 hours. This recent movement is part of a larger consolidation pattern that began on August 5.
Technical analysis of LINK’s price chart reveals a complex situation. The 200-day Exponential Moving Average (EMA) sits well above the current price, indicating an overall downward trend.
Meanwhile, the 50-day and 21-day EMAs are acting as dynamic resistance levels, which the price is struggling to break above.
Some analysts suggest that LINK might face an 18% drop, potentially bringing the price down to the $8-$9 range. This prediction is based on the formation of a bear pennant pattern on the daily chart. However, it’s important to note that market predictions are never certain.
Despite these bearish signals, there are also indications of potential upside. The Relative Strength Index (RSI) on the 4-hour chart is approaching the 50% level, which some traders interpret as a sign of a possible market rebound. The RSI has formed a double bottom at 46% and is now moving towards 50%, potentially signaling an upward reversal for LINK.
On-chain data provides additional insights into LINK’s market dynamics. Coinglass data shows that the balance of LINK on exchanges is decreasing. This trend often suggests that large investors may be preparing to buy, anticipating an upward move. Historically, low exchange balances have sometimes preceded price reversals.
Interestingly, while some traders are bearish on LINK’s short-term prospects, whales (large holders) appear to be taking a different stance.
Data from Coinglass reveals that over $2.77 million worth of whale buy orders have been placed between $8 and $9. This suggests that these large investors view this price range as a potential bargain and are preparing to acquire more LINK if the price drops to these levels.
The broader cryptocurrency market context is also worth considering. Some analysts believe that last week’s sharp sell-off may have marked the mid-cycle pullback low for many altcoins, including LINK. However, confirmation from the wider market would be needed before declaring a recovery.
For now, LINK’s price action shows signs of indecision. Small-bodied candles are forming near the apex of the current pattern, which typically indicates a potential breakout. However, the direction of this breakout remains uncertain.
