LINK/USD has dropped 11% in the past 24 hours and could plummet to lows of $7.80 if bears take control
ChainLink price could dip below $10.00 and continue on a bearish breakdown to lows of $7.80, the short term technical picture for the token suggests.
The outlook follows LINK/USD plunging more than 11% in the past 24 hours. In doing so, the cryptocurrency broke below a rising wedge pattern and a key support area.
LINK/USD daily action
ChainLink has traded at highs of $11.69 in the past 24 hours. However, the meltdown witnessed in the crypto market has meant that increased downward pressure sent its price to lows of $10.03.
Although bulls have pushed up to $10.36 at the time of writing, the breakdown below the aforementioned support pattern means that it could drop to as low as $7.80. This is the area around which the wedge pattern shown in the chart below started. It is also an area that provided major support as the price rebounded to highs of $12.93.
LINK/USD price action on the daily chart. Source: TradingView
Currently, the 50% Fibonacci retracement level of the upswing from $9.40 low to $12.93 high provides further support at $10.14. Beneath this, the bulls will rely on the strength around the 61.8% Fibonacci retracement level at the $9.40 swing low.
If bulls keep prices above $10.00, a breakout above the 100 – day simple moving average (hourly) at $11.09 could see a bounce near the major resistance area around $12. Once this barrier is cleared, LINK/USD could rally to highs of $12.83 and then attempt to clear resistance at $14.00.
ChainLink trading trajectory on the 4 – hour chart. Source: TradingView
As can be seen in the 4 – hour chart above, the token’s price action has also broken below the lower boundary of the rising channel. Once LINK/USD broke below the 100 – SMA level ($11.38), bears quickly pushed it towards the 50 – SMA ($11.36).
Downward momentum aided the bears’ course of action as the prices dipped below two key support levels around $11.20 and $11.00. That was before further losses clipped recent gains to leave bulls weak around $10.50-$10.20.
The short term bearish outlook will be confirmed if LINK prices drop to lows of $9.40.