Chainlink (LINK) has resumed weakness after a sharp decline, with a potential bear flag forming on the 12-hour chart. The price remains below key moving averages, keeping the bearish trend intact despite the bounce. Short-term indicators suggest a potential relief rally, but the overall picture remains bearish.
At the time of writing, LINK is trading at $8.60, recording a 24-hour trading volume of over $243 million and a market capitalization of approximately $6.15 billion, according to CoinMarketCap data. The token has declined 4.16% over the last 24 hours.
Source: CoinMarketCap
Chainlink (LINK) Faces Bearish Pressure
In a post on X, crypto analyst CryptoPulse stated, that “LINK appears to be forming a bear flag on the 12-hour chart.” After a strong fall, it has been consolidating in a gently rising channel, a common sign of a continuation in a bearish market.
Source: X
The immediate question is whether the price of LINK falls back near the channel’s upper boundary and slides towards the range of $8.20-$8.40, or will buyers’ strength resume to push the price past $10. A break past this level would invalidate the bearish pattern and turn the short-term sentiment back to bullish.
Chainlink Stays Weak Below Key Averages
From a technical perspective, LINK continues to face pressure as it trades below all major daily Simple Moving Averages. Resistance comes in the form of the 20-day SMA at $8.72, while a strong resistance zone is created by the 50-day SMA at $10.26, the 100-day SMA at $11.67, and the 200-day SMA at $15.93.
Source: TradingView
Momentum indicators are flashing caution signals, though mixed ones. The Relative Strength Index (RSI) is at 43.30, which is still below the neutral mark of 50 and indicates that bullish momentum is yet to gain ascendancy.
On the MACD side, the momentum is negative but shows a sign of recovery. The MACD line currently sits at -0.3397, slightly above the signal line at -0.4609. It also shows a positive histogram of 0.1212. However, the MACD line is still negative.
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Next Moves for Chainlink (LINK)
If LINK is not able to rise above the upper boundary of the bear flag and continues trading below $10, the chances of another dip increase. A break below the latest support level could potentially target $8.20 or even lower.
A strong close above $10 on the higher timeframes would diminish the bearish case and may lead to new buying interest. Until then, LINK’s price action remains cautionary, with the bias still on the downside.
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