LINK/USD price is poised at a crucial support level, with a breakdown likely if bulls fail to rally higher
ChainLink (LINK) could see a fresh decline towards $27 if bulls fail to break above a resistance level marked by the 100-day simple moving average on the 4-hour chart. Further declines could extend towards $23.
ChainLink might also see some downside volatility if Bitcoin (BTC) weakens and dips to support levels near $55k. Currently, the benchmark cryptocurrency is trading near $57,500 after failing to break above $60k this past week.
ChainLink price outlook
Bears might seize on any declines below $28.50 to attempt revisiting prices below $27. The technical outlook for LINK/USD on the 4-hour chart suggests this is likely, with the RSI dipping below the equilibrium point to currently sit at 42.
The LINK/USD pair is also below the crucial 100 SMA ($29.27), a price level that has restricted bulls over the past 12 hours. The Parabolic SAR markers have also appeared above the price to suggest further declines towards $26 are likely.
If LINK/USD dips below $26, the next support zone is likely to be at $23.
On the contrary, keeping prices above the trend line could aid an immediate breakout above the 100 SMA.
At the time of writing, LINK is trading at $28.93. The cryptocurrency’s price is down 1.6%, but crucially still above the support trend line of a symmetrical triangle pattern.
If prices rally above $29, bulls could likely establish support above $30. In this case, a retest of the resistance level near $34 could be followed by a run to the all-time high of $36.86 reached on 20 February 2021. Achieving this target could set the next challenge for bulls at $50.
ChainLink network activity supports a bullish view
Recent network activity suggests bulls might yet rally higher and see a fresh upside above $30.
According to on-chain analytics firm Santiment, ChainLink’s on-exchange supply has fallen by 14.6%. This suggests more investors are looking to hodl in anticipation of future gains. The platform also notes that the number of new addresses has continued to rise over the past three months, indicating a potential influx of new buyers.
“#Chainlink is trading a hair above $29, & the amount of new addresses created on its network has maintained its high rate nearly 3 months into 2021. $LINK’s ratio of supply on exchanges is also down to 14.6%, where it was last this low in July 2019.”