Chainlink has been one of the most promising cryptocurrency in the last two months, with price spikes that saw it break into the top 10 most valuable cryptos. The recent crypto crash in the last few weeks, however, saw its market price drop below $10 on 5th September.
Consolidation
The crypto recovered, hitting a price of $12 on 6th September. Since then, the Chainlinks price has been caught up in a prolonged period of consolidation with prices ranging from $11.5 to $12.7 in the past few days.
The consolidation is offering little insight into where the market may head next, after a strong bullish rally that saw it hit the $20 mark last month.
Technical analysis
At press time, the price of Chainlink is $11.82, trading within the price range it has bee trading in the past week. The prices are trading within support and resistance levels of $13.13 and $11.14 respectively. In the past week, the prices have failed to break out of the structure thrice after testing the structural resistance levels.
4 hours chart price analysis
The markets opened at $12.04 reaching highs of $12.07 before dropping to the lows of 11.69, with Chainlink price moving up to $11.82 at press time. This is an equivalent of a 2.11 percent drop in prices from its opening prices.
The 4-hour price chart shows indicates that the prices are in a consolidation which has lasted for almost a week, with prices failing to move out of the support and resistance structure.
Technical analysis indicators on the 4-hour chart
The 4-hour charts show that the Bollinger Bands have narrowed in the last one week. This is an indication of a market that has lost volatility. The prolonged period of low volatility from the Bollinger Bands is always followed by periods of high volatility and the market is expected to break out in the next coming days.
Combining the Bollinger Bands with MACD, which has the prices moving below the baseline, indicating a bearish move may be in the offing. The combination of the two indicators and the support and resistance price analysis shows that chainlinks may be ripe for short positions.
Fundamental analysis
The fundamental analysis further confirms that the prices may be headed for a longterm bearish movement, after putting the news of the last few weeks into context. The crypto, which is an integral part of the DeFi revolution has been one of the least affected DeFi cryptos after dozens saw their prices reduce by more than 50 percent in the past few weeks.
Analysts and investors are still worried that Chainlink may be the next DeFi crypto to see a mass selloff of their tokens. If that happens, the price of the crypto is expected to push downwards past the $10 dollar mark in a prolonged bearish move.
Disclaimer: The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.
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