Chainlink Forecast: Head-and-Shoulders Pattern Points to Downtrend
Chainlink price has formed a head-and-shoulders pattern on the daily chart. In price action analysis, this pattern is usually a signal of further decline. The daily chart shows that the LINK price has been under heavy pressure in recent months. A few days ago, the coin dropped to a low of $13.67, the same as the July 20th low. Recently, Link had recovered a bit and found strong resistance at around $18.
The price of Chainlink has declined a bit on Monday morning, January 31st. The entire crypto market was in a downtrend on Monday, January 31st, losing the gains made over the weekend. Link is trading at about $17, which is about 40% below its highest level in January and almost 70% below its highest level in 2021.
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Why is the price of Link falling?
Chainlink is one of the largest blockchain projects in the world. Link, its native token, has a total market value of about $7.8 billion, making it the 20th largest cryptocurrency in the world.
Chainlink is a unique project as it has no major competitors in its field of activity. It is different from other Layer 1 and Layer 2 blockchains such as Ethereum, Solana, and Polygon.
This difference stems from the fact that Chainlink does not offer a platform on which people can develop decentralized applications. Instead, it offers a system of so-called oracles. These help app developers integrate off-chain data into blockchain platforms.
For example, through Chainlink’s partnership with the Weather Channel, it is possible to display weather data in decentralized crypto projects. Similarly, it is possible to use API interfaces from Chainlink to integrate other types of data, such as data from crypto exchanges. There are even projects that use Link to display traffic data.
Therefore, Chainlink is a platform whose development is doing well by other blockchains, such as Ethereum, Binance, and Solana.
Recently, there have been several announcements from Chainlink Labs. For example, in December, the company announced that Eric Schmidt would become a member of its board of directors. It was a piece of important news, as Schmidt is one of the most experienced professionals in the world. In the past, he was even the CEO and chairman of the board of Google, among others.
Last week, Chainlink announced that it had hired Christian Catalini as a technical advisor. Catalini was a co-inventor of Diem, the blockchain platform owned by Meta (formerly Facebook). This month, Facebook announced that it was abandoning those plans and selling Diem.
Chainlink Price Forecast
The daily chart shows that the Link price has been under heavy pressure in recent months. A few days ago, the coin dropped to a low of $13.67, the same as the July 20th low. Recently, Link had recovered a bit and found strong resistance at around $18.
The Chainlink price is below the 25-day and 50-day moving average lines, while the MACD has dropped below a neutral reading. A closer look shows that the price has formed a head and shoulders pattern.
Therefore, the price of the Link coin is likely to fall further as the bears target the next important support level at $10.
(Featured image by Kanchanara via Unsplash)
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First published in CRYPTO MONDAY, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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