The LINK bulls are defending a support zone at USD 7.29 to push the price higher, maybe toward USD 9. The lack of purchases may cause a collapse due to the need for liquidity as high as USD 6.38 per token.
The Chainlink (LINK) bulls have defended the current support zone amid a mixed trend in the crypto market. If the volume of sales of the cryptocurrency increases, the price will likely suffer a new crash. It is trading at around USD 7.73 but would drop to at least USD 6.38.
LINK is trading at around USD 7.73 and has accumulated a 7.8% gain over the last week. While its daily trading volume is above USD 431.73 million, its market capitalization is about USD 3.44 billion, according to CoinGecko.
Although LINK has lost 2.2% over the last 24 hours, that pullback may be profit-taking. The price has reached a significant order block level, which is common in the crypto market.
Some Facts Might Help Stop the Drop in the Price
Chainlink is among the top 50 projects in the crypto market and is constantly growing. They plan to include a Proof of Reserve (PoR) procedure allowing holders to verify which assets they possess.
Since the crypto market has been to the downside, LINK has also given up part of its recent profits. However, watching price action in these situations might help, as the value of LINK might decline further.
The Daily Technical Analysis of the Price of LINK
The daily chart indicates that investors need to watch some small ranges in the price of LINK. The bulls are defending a support zone at USD 7.29 to prevent a drop toward USD 6.38. If the bulls manage to drive the value of LINK higher, it may reach USD 9.
The RSI indicates that the trend might continue the downside as its exponential moving averages (EMAs) have crossed below 55 points. The moving average convergence divergence (MACD) shows weakness, while its EMAs reveal a bearish bias.
However, the Japanese candlesticks have not crossed below the central ENV ranges, which indicates profit-taking might precede further increase.
The Bulls Must Defend the ENV Level to Search for Liquidity
There is an optimistic scenario for a bullish trend to develop, but anything may happen. Therefore, if the bulls cannot defend the ENV level due to the lack of purchases, there will be a collapse. That may occur due to the need to search for liquidity as high as USD 6.38 per token.
The price of LINK has to retest this support, but a daily close below USD 6.38 would be critical. The bears might take the opportunity to look for increasingly low levels in liquidity zone 1, close to USD 5.50.
Meanwhile, Bitcoin (BTC) is trading at around USD 22,860 and has accumulated a 0.2% loss over the last week. Its daily trading volume is above USD 24.71 billion, while its market capitalization is about USD 437.90 billion, according to CoinGecko.
By Alexander Salazar