If Bitcoin tanks below $13,000, LINK/USD will likely fall to prices below $10.00
ChainLink’s downward action threatens to wipe all the gains made since the rally to highs of $19.81 seen in August.
At the time of writing, ChainLink bulls are struggling to defend the area around $11.00, with the price down 6.6% in the past 24 hours. The downward pressure has seen the token’s price dip from highs of $12.05, notably dropping to lows of $10.86 in the past hour before a slight upside to $11.05.
LINK/USD price analysis
ChainLink recently ran into stiff resistance around $12.00, slowing the momentum that bulls had exhibited prior to the sell – off earlier this week. The cryptocurrency has printed a series of lows, with the past three daily candles red.
The MACD on the hourly chart is suggesting a weakening in the bearish pressure. To take advantage, bulls need to push above the 50 – SMA on the hourly time frame at $11.45 to aim for the next target.
However, as the price has been bound within a descending wedge pattern, the uptrend from lows of $11.05 is likely to face a major hurdle at the 100 – hourly simple moving average near $11.70.
The technical picture on the daily time frame suggests that the momentum is largely still with the bears. As shown in the chart below, sellers will likely consolidate their downside strength if they manage to push the prices lower. A close below the key support area at the 50 – day simple moving average level at $10.56 will open up a clear path to prices near $9.80 and below that to $8.40.
Analysts suggest that LINK/USD will likely tank further if increased selling pressure pushes Bitcoin (BTC) lower. As can be seen in the chart below, Bitcoin is flirting with the $13,000 support level as major alts trade lower on increased selling pressure.
But one analyst thinks that LINK will benefit from a stable or bullish Bitcoin. In a tweet posted after BTC/USD climbed from lows of $12,980 Thursday, Kevin Svenson notes that ChainLink’s uptrend over the past month largely mirrored BTC as the bellwether cryptocurrency raced to its 2020 high near $14,000.
“If Bitcoin can remain stable and/or bullish we could develop another parabolic trend going into 2021”, he added.
As such, LINK/USD rallying to highs around the $20.00 area is likely if BTC/USD holds above $13,000 and then rallies towards its all – time high of $20,000. Conversely, a downward flip to September lows of $7.30 could also happen.