ChainLink Price Holds above critical Support, But Resistance Looms above

The ChainLink price is attempting to bounce from Friday’s low, but significant obstacles litter LINK’s path higher. ChainLink (LINK) is slightly firmer in early trading Monday, extending the gains from Friday’s low to around 12%. However, LINK has lost 35% in the last three weeks. Subsequently, the projects market cap has plummeted from $17.7b to $11.7b in that time. Subsequently, ChainLink has slipped to the rank of the 20th-largest cryptocurrency, behind Uniswap.

Like many cryptos, the ChainLink price increased steadily from July through early November. By November 10th, LINK had advanced almost 200% from the July lows and appeared on track for a sustained run towards the May highs. However, the crypto market has seen mixed results in the last three weeks, with many assets eroding the gains made in the previous four months. Unfortunately, ChainLink’s 35% drop places it amongst the worst-performers in the top-20 list. For instance, even after Bitcoin’s torrid time last week, the market leader has only given back around 17% from the ATH. At the same time, Ethereum has fared even better and is just 11% shy of its $4,868 personal best.

But it’s not all bad news for LINK holders, and the price is trying to base out around the September lows. Furthermore, the proximity of the 200-Day Moving Average means it wouldn’t take much to swing the technicals back in favour of the bulls.

The daily chart shows the ChainLink price is trending uniformly lower below the key moving averages. The significant 200-DMA at $25.72 is the first resistance level. Above the 200-DMA, the former trend support (now resistance) joins the 100-DMA average at $28.11 to reinforce the overhanging resistance.

If LINK recovers the 200-DMA on a closing basis, it should also climb above the trend. In that event, an argument can be made for a return to the November highs. However, as long as the price remains below the average, the path of least resistance is lower. On that basis, the short term view is mildly bearish and highly bearish below $20.65 (September low).

In my opinion, the bearish view only carries weight below the 200-DMA. Therefore, a close above $25.72 invalidates the pessimistic outlook.

For more market insights, follow Elliott on Twitter.