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Chainlink (LINK) is flashing bearish signals as it forms a pennant pattern, hinting at a potential continuation of its downward trajectory. After struggling to gain bullishmomentum, the price remains in consolidation, with sellers keeping a tight grip on the market. If this pattern plays out, LINK could be at risk of a steep drop, with key support levels facing increased pressure.
Market sentiment appears cautious, as bulls attempt to hold the line against growing bearish momentum. A breakdown from this structure might accelerate losses, pushing LINK toward lower price zones. However, if buyers manage to invalidate the pattern, a relief rallymay be in play. Analyzing Price Action: Bearish Pennant Signals Breakdown
Currently, Chainlink continues to trade within the confines of the bearish pennant pattern, indicating a state of indecision in the market. Neither the bulls nor the bears have established firm control, as the price remains constrained within converging trendlines. Related Reading Chainlink Weekly Chart Looks Promising – If Bulls Reclaim $30 ‘ATH Are Next’ 1 month ago
Typically, this consolidation phase suggests that market participants are in a wait-and-see mode, anticipating a technical or fundamental catalyst for a decisive breakoutin either direction.
While the structureof a bearish pennant typically signals a continuation of the previous downtrend, LINK’s hesitation indicates that bulls are still attempting to defend key support levels. Nevertheless, without a strong surge in buying pressure, the risk of a breakdown remains high. Bearish pennant on LINK’s 4-hour chart | Source: LINKUSDT on Tradingview.com
If LINK breaches the lower boundary of the pennant with strong volume, an accelerated decline is likely, reinforcing the bearishoutlook and increasing selling pressure. This breakdown could attract bearish momentum, pushing the price toward key support levels.
Additionally, the asset is currently tradingbelow the 100-day Simple Moving Average (SMA), further strengthening the negative trend in the market. This positioning suggests that LINK’s ongoing attempts to regain upward momentum may face significant resistance. Potential Breakdown Targets: How Low Can LINK Go?
The formation of a bearish pennant in Chainlink’s price action raises the possibility of further downside, with the measured move target and key support levels providing a roadmap for potential price movement. Related Reading Chainlink Witnesses Highest Whale Activity Since 2023, Price Reversal Coming? 2 weeks ago
Should the bearsseize control and a breakdown occur below the lower trendline, LINK’s downward trend could accelerate, pushing the price below the critical $17.96 support level. This drop eyes a deeper decline toward the $15 mark, where buyers may attempt to regain momentum and prevent additional losses.
However, if bulls manage to defend these key levels and initiate a strong rebound, LINK might invalidate the bearish setup and shift toward a recovery, possibly targeting the $19.87 resistance level. A decisive move above this threshold would reaffirm bullish momentum and pave the way for more gains. LINK trading at $18 on the 1D chart | Source: LINKUSDT on Tradingview.com Featured image from Medium, chart from Tradingview.com