Chainlink (LINK) has witnessed a significant 14% decline in value over the past week, aligning with the overall market downturn. This drop has pushed Chainlink's price below critical support levels, indicating that regaining upward momentum will be challenging without new demand.
Examining Chainlink's price movements on a one-day chart reveals it is now below its 20-day exponential moving average (EMA). This EMA tracks the asset's average price over the past 20 trading days, emphasizing recent price shifts and aiding in identifying potential reversals in price action.
When the price falls beneath this crucial moving average, it signals a downward short-term trend, increasing the likelihood of further declines.
Additionally, Chainlink's price is on the verge of breaking below its Ichimoku Cloud, reinforcing its bearish outlook. The Ichimoku Cloud assesses market trends and support/resistance levels. A price drop below the Cloud suggests a prevailing bearish phase.
In such scenarios, the Cloud transforms into a resistance level, complicating any upward price movement without a significant surge in buying pressure.
Chainlink’s Aroon Down Line stands at 92.66%, indicating a strong price decline. A reading near 100% reflects a consistent trend of lower highs, suggesting that if this trend continues, Chainlink’s price could plummet an additional 27%, potentially revisiting its August 5 low of $8.12.
Nevertheless, should Chainlink experience a resurgence in buying pressure and successfully break above the Cloud and 20-day EMA, its price may rise towards $19.73.
