The cryptocurrency market has been in a consolidation phase since the beginning of the week, with major altcoins experiencing neutral price movements. Ethereum (ETH), the largest altcoin, hovers around the critical support level of $3,800, suggesting a cooling in market activity. This consolidation trend reflects a broader market pattern of stagnant price action, with the potential for either a breakout or continued consolidation. In contrast, Chainlink (LINK) has experienced a significant downturn after a bullish run over the past two weeks.

Technical Indicators Signal Negative Outlook for Chainlink

During the recent bullish sentiment in the cryptocurrency market, Chainlink formed an ascending channel pattern on the 4-hour chart. However, LINK has since broken out of this formation, indicating a shift in momentum towards a bearish trend. Currently, LINK is trading at $17.91 with a market cap of $10.47 billion, ranking 13th by market cap.

Technical indicators point to a bearish outlook for LINK. The Simple Moving Average (SMA) on the 4-hour chart indicates a downtrend, suggesting that selling pressure may continue to dominate. Additionally, the Moving Average Convergence Divergence (MACD) indicator shows a rise in the red histogram, reflecting increased selling pressure and a significant decline in the averages, signaling further potential loss in value.

What’s Next for LINK?

Looking ahead, the key question is the direction LINK’s price will take. If the market gains momentum, LINK is expected to retest the resistance level at $18.25. Should the bulls maintain the price above this level, LINK could aim for the upper resistance level at $19.22, indicating a potential recovery and a continuation of the bullish trend.

Conversely, if the bears retain control, LINK is likely to retest the significant support level at $17.20. Failure to defend this level could lead to a further decline, with the price potentially falling to the crucial support level at $15.92 in the coming weeks, continuing the bearish trend and posing a significant challenge for LINK investors