Chainlink’s Response to Bitcoin’s Influence in a Bearish Market
In this analysis, we will examine the recent price movements of Chainlink (LINK) and its on-chain activity to uncover trends and potential future directions.
While Bitcoin saw a rapid increase in price from $60,700 to $63,000, Chainlink failed to break through the significant resistance level of $13.7. This failure to surpass the resistance level indicates a bearish sentiment in the market.
The current price of LINK is trading below a crucial yellow range, which could act as a resistance level in the coming days. The fact that the price remains below this range signals bearish sentiment in the market. Despite Bitcoin’s recovery to $63,000, LINK did not see a similar price increase, aligning with bearish trends observed in other tokens like PYTH. Decreasing trading volume has also contributed to a significant price correction.
Examining on-chain metrics reveals a notable decrease in exchange deposits and LINK withdrawals, leading to low trading volumes. This decline in active trading volume suggests that the price of LINK may face downward pressure, potentially reaching the major resistance level of $11.9.
Additionally, there has been a decline in the creation of new addresses on the Chainlink network, indicating reduced demand from new market investors. This decline in active address creation correlates with the decrease in LINK’s price, highlighting a lack of new investor interest.
In summary, Chainlink is displaying several bearish signs, with the key to its short-term price movement lying in its ability to break above the resistance range. Traders should monitor trading volumes and exchange activity for potential shifts in market sentiment. It is crucial to approach trading cautiously in the volatile crypto market.
Looking ahead, if Bitcoin continues its upward momentum towards $65,000, it could positively impact Chainlink. However, if Bitcoin falls below $60,800, LINK may experience a significant price decline, extending its bearish trend. In a bearish scenario, LINK’s price could potentially drop to $11.9.
For traders, it is advised to wait for a lower price to buy LINK, around $12 – $12.5, and set a stop loss at $11.5. Aiming for a sell price of $15 might be a wise move. Remember to conduct thorough research and consult with a professional before making any financial decisions in the ever-changing market conditions. The importance of staying active during quarantine
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