Chainlink (LINK) Price Prediction: Potential Drop To $8 As Bearish Pattern Indicates Imminent Collapse

Chainlink (LINK) could face a significant price drop soon, warns renowned technical analyst Crypto Yapper. This prediction is based on the formation of a potential head-and-shoulders pattern on the weekly chart, a technical indicator often signaling a price decline.

The head-and-shoulders pattern features three distinct peaks: the left shoulder, the head, and the right shoulder. In LINK’s case, Crypto Yapper points out a left shoulder around $17, a head at approximately $23, and a right shoulder near $19. This symmetrical structure suggests a bearish formation and potential price decline for the cryptocurrency.

A crucial element of the head-and-shoulders pattern is the neckline, a horizontal support level typically drawn around the price point where the two lows (between the shoulders and the head) form.

For LINK, this neckline is critically at $12. A breach of this level could trigger a significant drop, potentially driving the price down to the $8 range. This projection aligns with the technical principle that when the neckline is broken, the asset often falls by a distance equal to the height between the head and the neckline.

Bearish Signal For Chainlink

Since Mar 2024, the price has been declining from its peak, indicating sustained selling pressure. Recent price action further supports this bearish outlook. LINK recently broke through the critical $12 support level and is now trading at a precarious $11.74.

Additionally, daily technical indicators show a similar trend. Both the 50-day and 100-day Exponential Moving Averages (EMA) are above LINK’s current price at $13.68 and $14.45, respectively. This positioning indicates a bearish sentiment, suggesting that the coin faces selling pressure and the prevailing trend is downward.

The Relative Strength Index (RSI) is at 35.22, indicating that Chainlink is nearing oversold territory (below 30). While not yet oversold, this value suggests that Chainlink is approaching conditions ripe for a further decline before any potential price correction or rebound.

The Awesome Oscillator (AO) is currently at -0.96, indicating negative momentum. This oscillator measures market momentum, and its value suggests that downward pressure is increasing. Similarly, the Chaikin Money Flow (CMF) is at -0.11, reflecting stronger selling pressure than buying interest.

Furthermore, the author’s views are for reference only and shall not constitute investment advice. Before purchasing, please ensure you fully understand and assess the products and associated risks.