LINK/USD could tank towards $21 if bulls fail to hold prices around the $25 support area
The price of Chainlink has bounced within a broad range between $26.96 and $25.22 since declining by over 12% on Tuesday. The cryptocurrency's price is 3.7% and 0.7% in the red in the past 24 hours and on the weekly time frame respectively, illustrating the recent struggles.
In the short term, LINK price might first seek support at lower levels before rebounding towards recent peaks.
At time of writing, the 15th ranked token is hovering around $25.40, with signs of weakness among buyers. The token's price outlook also currently mirrors widespread sell-off pressure in the crypto market, which might result in fresh declines towards $21.
However, LINK price is up more than 40% over the past 30 days and over 79% up in the past year to highlight a potential long-term price boost.
LINK price analysis
Buying pressure for Chainlink has decreased as shown by the shrinking trading volume, suggesting bears could seize the initiative and push prices lower. With major coins like Bitcoin, Ethereum and Cardano also slipping in the past 24 hours, an injection of further pessimism could trigger a downturn for LINK/USD.
LINK/USD 4-hour price chart. Source: TradingView
On the 4-hour chart, LINK price has remained lodged below the 100MA and the 50MA over the past two days. The RSI is also at a new low point below 50 to suggest bears are likely to strengthen.
There's also a hint of a bearish pennant formation, a continuation pattern whose validation could include a retest of the 0.618 Fibonacci retracement level of the swing from $13.33 to $30.54. The reload zone is near $23.97 on the 4-hour chart, with further support likely at the 0.5 Fib level at $21.94 and then the psychological level of $21.
If bulls stem the rot and Chainlink price breaks higher, there is a robust supply zone around the $27 area. Here we find the 0.786 Fib level ($26.86), the 100MA ($26.90) and the 50MA ($27.21) as potential rejection levels.