Chainlink is now trading at half of the price it was at just months ago, after entering price discovery mode and setting new high after high.
If the once-unstoppable a dive to $1 on Black Thursday was bought up with extreme fury, and the rebound effect in part helped propel Chainlink to a new peak after peak throughout the year.
Related Reading | Three Reasons Why Chainlink’s Downtrend Against Bitcoin Just Started
After touching $20, however, things came crashing down, and the with Bitcoin is as bullish as can be.
Now, Chainlink is back trading at just $10 and is on the cusp of an especially critical weekly close that could send the Bollinger Bands technical analysis indicator.
Related Reading | This Chart Suggests Chainlink’s Parabolic Rise Isn’t Finished
A candle close through the middle-BB either way, is considered a buy or sell signal, and a large move often results. Note in the chart above, the candle close above the middle-line is what sent Chainlink into overdrive in 2020.
The tool has been so effective at acting as a sell signal for LINKUSDT in the past on weekly timeframes, that out of five prior times the asset closed below, it resulted in an on average decline of 43%. Corrections range from 20% to 70%, putting 43% just about right smack in between the two stats.
The decentralized oracle altcoin losing the middle Bollinger Band could be deadly | Source: LINKUSDT on TradingView.com
A 43% fall from here, would put Chainlink at about $6, which was the last touch of support before the a parabolic rise to $20.
Some analysts claim that parabola isn’t over, but even $6 might not be the final bottom if they are wrong. According to experts such as Peter Brandt, who accurately called Bitcoin’s 84% decline a year in advance, claim that any asset that loses such a powerful trajectory is bound to decline by nearly as much.
A full 84% retracement in Chainlink, just like Bitcoin did, would take it to $3. Falling 90% or more as other altcoins have would bring the cryptocurrency back to a buck and a half per LINK.
While that might sound shocking for such a promising cryptocurrency, remember, all cryptocurrencies have experienced such drawdowns in their lifetimes. Except for maybe Chainlink – why will it be any different?
Featured image from Deposit Photos, Chart from TradingView.com