LINK traders waiting for lower prices to ride the bull back up may just have the ideal opportunity. This is because Chainlink price just demonstrated a major bearish pattern that could see drop even further.
LINK price action has been forming a head and shoulders pattern which suggests price may he headed for more downside. The Chainlink-native crypto formed the first shoulder top in the first few days of December. The head marked the mid-month top and the right shoulder formed this week.
LINK initially kicked off the week on a bullish leg, but pivoted mid-week. Its $21.97 press time price tag was a 15.21% discount from its weekly high.
The head and shoulders pattern is traditionally considered a bearish sign. This means LINK could potentially extend its dip from the press time price tag.
Main Chainlink Price Targets
The current sentiments and projections for 2025 are bullish. If that is so, then LINK could be on the verge of another major rally. Any short-term pullback that may happen between and then could thus be an opportunity buy in at a steeper discount.
But just how low can LINK go, before encountering the next bottom range or accumulation zone? The next potential support range is between $18.60 and $19.80. However, some analysts believe that price could dip as low as $14.
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#Chainlink $LINK could go as low as $14 if this head-and-shoulders pattern is confirmed! pic.twitter.com/86uhsV4UQ9
— Ali (@ali_charts) December 26, 2024
The prediction suggests that LINK will experience enough sell pressure price to push below the latest swing low to wing high Fibonacci range. Going by this indicator alone, the next support level would be expected around the $18 price zone.
LINK price will likely test the aforementioned price levels if it maintains sell pressure a while longer. Its spot flows were higher in the last 4 weeks than they have been in the last 12 months.
Outflows were particularly more dominant than inflows in December. This confirmed a strong wave of pressure, largely due to profit-taking after an impressive bullish run since November.
The spot outflows were consistent with exchange flows. LINK had roughly 1.02 million coins flowing out of exchanges as per the latest data. Meanwhile, exchange inflows were notably lower at 713,820 coins.
The exchange flows confirmed that the Chainlink-native coin had at net negative flows, hence losing liquidity.
Meanwhile, LINK funding rates have cooled down considerably in December compared to November. Funding rates were mostly positive during that time. However, negative funding rates dominated in the last 2 days indicating a shift in trader sentiment.
The shift from positive to negative funding rates aligns with the expectations of more downside. Positive funding rates are historically associated with a preference for longs while negative funding rates lean in favor the bears.
Remember that these bearish expectations do not guarantee that the outcome will align in that direction. The emergence of robust demand is still a significant possibility.
Such an outcome would curtail the cryptocurrency’s potential downside. However, the head and shoulders pattern comes after an impressive rally, hence profit-taking is bound to be high.
In addition, the overall excitement levels in the market have been declining. A combination of these factors make a strong case for the bears.
