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Chainlink heads to key support level – is a rebound likely?

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Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

Bullish momentum faltered at a bearish order block.
Shorts’ 53.89% advantage on the long/short ratio highlighted bearish market sentiment.

Chainlink’s [LINK] foray to the $8 price zone was short-lived, as a deep retracement reversed a substantial part of the bullish gains. A 12% price drop from the $8 price zone has set LINK on a path to retest the critical $7.2 support level.

Read Chainlink’s [LINK] Price Prediction 2023-24

With Chainlink mirroring Bitcoin’s [BTC] bearish activity, the defense of the $7.2 support level will be key for bulls to maintain the uptrend.

Bearish order block halts bullish uptrend

Source: LINK/USDT on Trading View

Chainlink’s bullish run in July saw the altcoin record massive gains. The 47% pump took it from the $5.9 support level to touching distance from its year high. However, the bearish order block (OB) between the $8.1 and $8.7 resistance levels stood in the way of more bullish gains.

The sharp drop in prices highlighted selling pressure at the bearish OB. Despite the retracement, the 12-hour timeframe showed that LINK remained on an upward trend. With price approaching the $7.2 support, a break in that level could signal a bearish intent to flip the market structure.

The bearish crossover on the Moving Average Convergence Divergence (MACD) indicator revealed growing bearish strength. This was also reflected in the Relative Strength Index (RSI) dipping from the overbought zone to the neutral 50 mark.

Taken together, they showed growing selling pressure and waning buying demand.

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Author: Suzuki Shillsalot

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