Chainlink Just Broke Its Bullish Market Structure for the First Time in Ages
Chainlink has been caught in the throes of intense volatility in recent weeks, with its price incurring parabolic momentum before facing an influx of selling pressure that sent it reeling significantly lower.
This volatility has come about as talks of LINK’s growth heat up, with mainstream news outlets covering its ascent and prominent social media figures like Dave Portnoy shilling it to their followers.
Despite this, LINK is showing some signs of weakness at the present moment, with buyers being unable to maintain the momentum that it incurred last week.
As a result, the cryptocurrency has faced a strong retrace that has yet to result in any type of rebound.
This has led one trader to note that the cryptocurrency has broken its previously bullish market structure for the first time in a while.
As a result of this, the trader is anticipating Chainlink to see some notable near-term downside, which could lead it as low as $10.00 in the weeks ahead.
Chainlink Consolidates Following Strong Rejection Above $20.00
At the time of writing, Chainlink is trading up just under 3% at its current price of $16.60.
These gains have come about due to the strong rebound it was able to post at $14.00, with buyers subsequently building a base of support at $15.00.
The multiple rebounds it was able to post at this support have allowed the crypto to dodge the market-wide decline seen today and post some slight gains.
That being said, it is still trading down significantly from its weekly highs of over $20.00 that were set just a few days ago.
The strong uptrend that led it up to these highs came about after Barstool Sports founder Dave Portnoy shilled the cryptocurrency to his over 1 million followers, buying LINK and Bitcoin during a recent meeting with the Winklevoss Twins.
LINK’s Latest Decline Struck a Blow to Its Market Structure
Despite the strength seen today, analysts are still expressing caution when it comes to Chainlink’s near-term outlook.
One trader noted in a recent tweet that the rejection and decline from its $20.00 highs had broken its market structure.
As a result, he is anticipating it to see a move down to one of its immediate support levels. These exist at roughly $13.00 and $10.00.
“Chainlink – First break in market structure in a long time. I wonder if it leads to more significant downside, but here are the levels I’m looking at before coming back into the old range.”
Image Courtesy of Calmly. Chart via TradingView.
Unless LINK extends its slight momentum today and starts navigating back towards these highs, further downside is likely imminent.
Featured image from Unsplash. Charts and pricing data from TradingView.