- Chainlink is at risk of dropping 50% of its value once a specific level breaks.
- LINK sees pressures mounting as overall investors back further away from Cryptocurrencies.
- Default of Celsius Network might not be the last, more defaults could trigger a crypto existential crisis, battering LINK price action.
Chainlink (LINK) is still moving in the same technical playbook setup marked up at the beginning of June. After over a month, bulls have not been able to move out of the bearish triangle and look even bleaker, as not even a test for the breakout was performed. With this bearish sentiment still dictating the price action, do not expect to see a recovery anytime soon, as more bearish pressures could start to weigh on $5.00 and trigger a falling knife towards $2.94, killing off 50% of its value from where LINK is quoting at the time of writing.
LINK set to slide from $6.00 to $3.00
Chainlink price lives to die another day as price action is still moving in an overall bearish triangle with the 55-day Simple Moving Average (SMA) and the tilted red descending trend line moving in tandem. With this double bearish belt keeping price action muted to the upside, bulls have not been in shape at all to put up a fight. It even needs to take us back to June to see a test on the trend line and 55-day SMA, which received a firm rejection.
LINK price thus lacks the firepower from bulls to break the chains of this bear market in cryptocurrencies. And that is not where the bad news stops. With global economic numbers deteriorating further, investors are further backing away from cryptocurrencies to let their hard-earned cash hibernate in a somewhat safe haven asset. Where crypto has long been proclaiming it is entirely independent of the world economy and it could only go one way, the truth seems to be the opposite. Reality now bites hard on crypto investors, setting up LINK for an exodus that could rapidly trigger a fall to $3.00 once that inflection point where investors had enough is reached.
LINK/USD Daily chart
The Relative Strength Index (RSI) has though some positive news. Normally, one would expect that the RSI would be trading in oversold constantly, but, instead, it has made it to the mid 50-level, showing that there are still market participants that believe and invest in Chainlink. Once global market sentiment stabilizes and bottoms out, investors could quickly return and jump in the price action when LINK can break the red descending trend line. A quick rally that could quickly reach $10 within the next few days would then unfold.