Chainlink Price Could See More Downside Following 80% Decline

Chainlink Price Risks Nosedive if This Level Is Lost

The Chainlink (LINK) price is at risk of breaking down from the $6 horizontal support area, something which could trigger a 25% fall.

The LINK price has fallen since reaching a maximum price of $53 in May 2021. The downward movement led to a low of $5.30 in June 2022. 

Since then, the LINK price has hovered above the $5.80 horizontal support area. During this time, the weekly RSI generated a bullish divergence (green line), something that often precedes upward movements. However, both the trendline of the divergence and the $6 horizontal support area are at risk of breaking down.

If this occurs, the LINK price could fall toward the next support at $4.30. This would amount to a drop of 25%. Currently, this seems to be the most likely Chainlink price prediction for January. Conversely, a bounce at the $6 support area would likely lead to a bounce toward the $9.20 resistance area.

LINK/USDT Weekly Chart. Source: TradingView

The daily chart supports the possibility that the LINK price will break down from the $5.80 support area. The main reason for this is that the daily RSI broke its bearish divergence trendline. This is a sign that the direction of the future price movement is bearish. The decrease has also accelerated over the past 24 hours.

Moreover, the LINK price is following a descending resistance line that has been in place since the beginning of November. The line could reject the price if a bounce occurs. In case of a breakout, it is possible that LINK will reach $7.50, the 0.5 Fib retracement resistance level, and a horizontal resistance area.

LINK Daily Price Drop
LINK/USDT Daily Chart. Source: TradingView

As a result, the daily and weekly time-frames combine to provide a bearish LINK price analysis. A breakdown from the $5.80 support area and a drop toward the $4.30 support is the most likely scenario. A reclaim of the $7.45 resistance area would be required for the Chainlink price forecast to be considered bullish.

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Disclaimer

BeInCrypto strives to provide accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. You comply and understand that you should use any of this information at your own risk. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.

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