Chainlink Shows Signs of Struggle
Chainlink (LINK) experienced a significant surge in October, breaking through resistance and reaching a new high for 2023 at $17.67 in late December.
However, the price has been on a decline since then, with last week witnessing an accelerated pace of decline and reaching a low of $12.20. The token has managed to stabilize since then, showing a long lower wick, but there are still four days remaining before the close of the week.
Source: TradingView
The weekly momentum indicator RSI is displaying mixed signals as it falls but remains above the neutral 50 level.
Analyst Viewpoints
Analysts and cryptocurrency traders on Platform X hold a bullish outlook for Chainlink.
CryptoBull suggests that Chainlink’s price dynamics mirrors that of Ethereum (ETH) in 2020, leading to an expectation of a price surge above $250.
Weekly chart LINK/USDT. Source: X
DavidOnCrypto believes that the recent decline does not mark the start of a new downward trend:
“Look at this “scam wick”, simply designed to liquidate leveraged longs. And boom! We are again in an ascending triangle.
Closing the week inside this pattern will keep the ascending triangle intact. Then the price will have no choice but to break $16 this quarter.”
LINK Forecast: Potential Bottom Reached
Technical analysis of the daily timeframe indicates that the price may have reached a local bottom.
Based on Elliott wave analysis, LINK appears to be in the fifth and final wave (black) of a bullish price structure that began in June. The fourth wave was contained within an ascending parallel channel (black), with its bottom nearly touching the support line of the long-term ascending parallel channel.
If this analysis holds, wave four concluded on January 3, and wave five is now in progress. The hidden bullish divergence in the daily RSI supports this possibility.
If the price breaks out bullishly from the channel, the target for LINK could be $23.60 (corresponding to the 2.61 level of the external correction of the fourth wave and the resistance line of the long-term channel). Achieving this target would result in a 65% increase from current levels.
Source: TradingView
Despite the optimistic outlook, a daily close below the channel support line could trigger a 16% decline, with the price potentially testing the long-term channel support line at $12.50.
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