Consequently, Chainlink started what would be a two-week pullback, worth 71.7%, that would see LINK hit a local low of $15 on the 23rd of May. The price of LINK soon rebounded to the $28 price level and is currently trading at $27.162 and slightly above the 200-day moving average. This important moving average can be seen (green) in the following daily LINK/USDT.
A Death Cross Looms for Chainlink (LINK)
Also from the chart, it can be observed that the 50-day moving average (white) is on a path towards intersecting with the 200-day moving average in the next few weeks. Such an event would be the dreaded death cross that usually confirms a bear market for any asset.
In the case of Chainlink, several indicators point towards a possible retest of the $15 price area in the weeks to follow.
To begin with, and from the chart, the daily trade volume has been decreasing with the daily MACD highlighting a slowdown in buying of LINK. The MFI is also on a path towards entering overbought territory and the RSI confirms the reducing buying of Chainlink in the crypto markets.
In summary, Chainlink has a high probability of dropping back down to the ‘teen’ levels towards the end of June.
However, such an event can be negated by Bitcoin breaking past the $40k resistance and forging a path towards $50k. But Bitcoin is also facing a death cross of its own that would accelerate a drop by Chainlink in the second half of June.