Chainlink (link) – Recently adopted bearish tone is expected to endure in the short-term

Chainlink (link) – Recently adopted bearish tone is expected to endure in the short-term

Posted on Tuesday, September 6 2022 at 8:37 pm GMT+0000

Chainlink (link) has been forced to reverse lower thanks to resistance from the short-term ascending channel’s return line, and the price dropped harshly penetrating the 20- and 40-period simple moving averages and the lower bar of the channel, shifting focus back to the downside following a rosy week which saw the price recovering more than 40% of the mid-August steep sell-off.

The momentum indicators are currently warning that there might be additional bearish occurrences in the near future. Both the ROC and IMI dipped dramatically into the bearish regions, and the stochastic oscillator made a dramatic pivot as well, with its %K line falling without a parachute to the oversold zone.

So, currently the decline is expected to gather a remarkable pace towards the September 1st low of 6.45. but however, the gloom will not likely stop at this point, and the bears will push forward for a fresh test of the August 29th bottom at 6.19. By snapping that key base, those will then sink the price to the July 13th low of 5.69.

The breakout of the channel’s trendline has yet to be confirmed, and if the price swiftly jumps back inside the ascending pattern, the bulls will immediately challenge the September 2nd intraday high at 7.24 aiming to resurrect the short-term recovery. By conquering that barricade, they will immediately advance towards the last high at 7.55. Another victory here and more importantly a thrust beyond the channel will shift attention to the August 17th inside low at 7.94.

In brief, Chainlink’s recently readopted bearish tone is expected to endure in the short-term, with bears’ eyes currently turned initially to the 6.19 bottom. Only a fast rally beyond 7.24 could reduce negative risks, while a jump above 7.55 is needed to restore bulls’ confidence.