The crypto markets are being jostled between bullish and bearish forces, which have been exerting pressure at frequent intervals. Bitcoin recently topped at $126,199, following which a plunge dragged the levels below $120,000 for a while. However, the start token continues to remain under bullish influence, but this popular DeFi token is feared to lose some ground. Chainlink has remained stuck within a strong bearish pattern and is therefore expected to drop to the lower support level if the bulls fail to break the resistance.
The LINK price has been forming constant lower lows and highs, signifying the strong presence of the bears since the August reversal. Besides, the trading volume has also been decreasing since then, suggesting a drop in the traders’ interest. Above all, the price has been struggling to break through an important resistance level, which it has failed to do for the past few days. This could raise a concern about the next price action amid the bullish possibilities.
As seen in the above chart, the LINK price is trading within a consolidated phase as it sustains within the Ichimoku cloud. However, the conversion & base lines have undergone a bearish crossover, due to which a significant pullback could be on the horizon. Additionally, the CMF or the Chainkin money flow, has plunged below 0, hinting towards a notable outflow of liquidity from the platform. Considering all the technicals and the chart patterns, it seems that the Chainlink price is primed for a correction, but the question arises: how deep could it be?
Regardless of the upward pressure, the bulls have been able to defend the local support at $21.5. A reversal is quite possible at this range, and if not, the final support at the 200-day MA could be tested. This aligns with the support of the descending channel at $19.15. If the Chainlink (LINK) price squashes the bearish pressure and triggers a rebound, a break above the channel may push the token higher.
However, it is important to note that a breakout from the important resistance zone between $25.77 and $26.05 may invalidate the bearish trajectory, paving the way to test higher targets.
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