Chainlink Price Faces Potential Decline to $11 as Support Weakens

Chainlink's current price is nearing a crucial support level, with bearish signs emerging that could lead to a drop towards the $11 range.

Key Takeaways

Chainlink's price is testing a critical support level, risking a decline towards $11.
A breach of the asymmetrical triangle's support could lead to a measured move decline.
The BBWP indicator suggests potential volatility ahead.
Strengthening fundamentals include Circle's Arc testnet and Grayscale's ETF application for Chainlink.

This analysis highlights the current dynamics surrounding Chainlink and its potential price movement based on technical indicators and market fundamentals.

Chainlink price

Technical Analysis of Chainlink Price

Chainlink

Chainlink (LINK) has recently dipped below its ascending trendline support, which is the lower boundary of a symmetrical triangle formed since the October 10 flash crash to $15. Symmetrical triangles often indicate market indecision, showcasing a struggle between bullish (lower highs) and bearish (higher lows) forces, suggesting that the price can move in either direction.

The BBWP (Bollinger Band Width Percentage) indicator, which measures volatility fluctuations, has seen its volatility line cross above the moving average after a period of extreme lows. This crossover frequently signals a significant price movement. Given that LINK has breached the triangle’s support trendline, the outlook appears bearish at this time.

If the daily candle closes below $16.50, Chainlink may face a measured decline potentially reaching $11.30. This figure is derived by subtracting the triangle’s maximum height of $5.20 from the breakdown point at $16.50.

Chainlink price risks sharp drop to $11 as symmetrical triangle support gives way - 1
Chainlink price 1D chart | Source: TradingView

The bearish sentiment surrounding Chainlink’s price stands in stark contrast to its improving fundamentals. Recently, Circle, the issuer of the USDC stablecoin, announced the launch of the testnet for Arc, its layer-2 network that focuses on stablecoins. Chainlink will serve as a technology partner for this network, providing essential oracle solutions to its developers.

Moreover, Grayscale's recent application to convert its existing Chainlink Trust into a spot ETF—potentially under the ticker GLNK—could serve as a medium-term catalyst. If this ETF application progresses through the SEC review process, it may attract speculative investments and bolster positive sentiment within the market.