The ChainLink (LINK) price has been decreasing alongside a descending resistance line since its Aug 16 all-time high.
Unless the price is successful in breaking out above this resistance, the price movement is still considered corrective.
LINK Breaks Down from Bullish Pattern
The LINK price has been decreasing since Aug 16, when it reached a high of $20.11.
While the price seemingly began an upward move on Aug 21, it reached a top shortly after with a high of $17.77. This created a lower-high and a descending resistance line that the price has been trading under since.
LINK has been recently trading between support and resistance at $10 and $13.30, respectively. The horizontal resistance has been validated multiple times, as can be seen in the multiple wicks on the daily chart.
Cryptocurrency trader @TradingTank outlined a LINK chart which shows an ascending triangle, normally considered a bullish continuation pattern.
Since the tweet, the price has broken down from the triangle instead and has even dipped below the $11.40 support area.
Due to the breakdown from a bullish pattern, it would be more likely for the price to retrace all the way to the $10 support area outlined in the previous section.
Technical indicators in the daily time-frame do not yet show any signs of a reversal. The MACD, Stochastic Oscillator, and the RSI are decreasing, the latter failing to even reach the 50-line.
These are signs that further support the theory that LINK will reach the $10 support area.
Since the aforementioned $20.11 high, the LINK price has been correcting, having possibly completed an A-B-C formation (in black below). However, it is not yet clear if the formation is a part of a larger A wave of a correction, or if the price has completed the entire correction and has now begun an upward move.
Until the price breaks the descending resistance line connecting the beginning of the correction and the top of the B wave, we cannot state that the price has begun an upward trend. This belief is strengthened by the bearishness from technical indicators.
To conclude, the LINK price is expected to continue to decrease towards $10, and it’s possible that the correction is not yet complete.