On August 26, Chainlink (LINK) price jumped to $12.55, sparking speculation that the altcoin could be poised for a major breakout. However, despite notable efforts to push the price higher, the uptrend hit snags, leading to a decline to $11.25.
Currently, the LINK technical setup presents a bearish outlook, challenging the push to higher value. In this analysis, BeInCrypto looks at the factors preventing a breakout and where the cryptocurrency will go next.
Chainlink hits $12.55
Chainlink (LINK) price has fallen 17% in the last 30 days. However, a symmetrical triangle has formed on the daily chart, characterized by two converging trend lines: one ascending line connecting a series of troughs and one descending line connecting swing highs. This pattern could be either bullish or bearish, depending on how the price action evolves.
If LINK price breaks out of this symmetrical triangle, it could lead to a rally. Conversely, a failure to break out could keep LINK trading in a range.
Earlier this week, LINK attempted to move above the pattern after bulls defended the $9.95 support level. However, the price pulled back, facing resistance around $12.55.
Read more: What is Chainlink (LINK)?
The Ichimoku Cloud, a technical analysis tool used to identify support and resistance levels, further confirms this analysis. Typically, if the cloud is above the price, it suggests strong support, increasing the chances of the price rising.
In LINK’s case, the cloud remains above the price, indicating that the altcoin may struggle to rise above the $11 mark in the short term.
LINK Price Forecast: The Road Back to $10
A closer look at the daily chart shows that LINK price is currently trading near the 20-day exponential moving average (EMA), shown in blue. The EMA indicates the direction of the trend. Meanwhile, LINK is also trading below the 50-day EMA, shown in yellow, suggesting that the cryptocurrency does not have a clear breakout opportunity yet.
The Fibonacci retracement indicator, which helps identify support and resistance levels, offers additional insight into LINK’s price potential. Resistance is currently found around $12.33, where the 38.2% Fibonacci retracement level is located.
Read more: How to Buy Chainlink (LINK) and Everything You Need to Know
Given the weakened buying pressure, LINK may struggle to reach this resistance level in the short term, with the next potential support being around $10.71. However, if Chainlink experiences a significant influx of buying activity, the bearish scenario may not play out and the price could potentially rise to $13.65.
