Chainlink has been caught within a prolonged consolidation phase throughout the past few weeks, with the cryptocurrency largely trading between $12.00 and $12.70.
This consolidation has done little to offer insights into its near-term outlook, as its bulls are still reeling from the damage done to its market structure following the $20.00 rejection.
Analysts are now noting that where it trends next may depend largely on its ultimate reaction to a key resistance level that its price is fast approaching.
One trader is noting that he is expecting it to see a rejection at this level, which could spark a sharp selloff that sends it reeling significantly lower in the days and weeks ahead.
He is specifically targeting a move towards its macro range lows of $10.00 that have been tapped on a few brief occasions throughout the past few weeks.
If this decline takes place, it could come about due to weakness seen amongst the aggregated market.
At the time of writing, Chainlink is trading up just under 1% at its current price of $12.56. This is around the price at which it has been trading throughout the past few days and weeks, with it struggling to break into the $13.00 region.
The recent trading range between $12.00 and $13.00 that it has been caught within was first formed earlier this week when LINK ran to highs of $13.20 before facing a swift rejection.
This movement came about in tandem with Bitcoin’s push to $10,500 and Ethereum’s rally to $380.
While Chainlink remains well below its recent highs, BTC and ETH are both currently in the process of testing their respective resistance levels. ETH has even been able to surmount $380 as its bulls express significant strength.
While speaking about Chainlink’s current technical outlook, one analyst said that he is watching a few mounting signs of weakness.
He does note that this weakness could be invalidated with a firm break above $13,200.
“LINK / USD: Honestly not really looking to great right now, currently not looking like the best time to take a long position at resistance but if PA can flip $13.2 I would be long… Maybe I should just listen to the marines and degen long?”
Image Courtesy of Cactus. Chart via TradingView.
How Chainlink trends in the coming few days and weeks may depend, at least partially, on whether or not Bitcoin and Ethereum can maintain their present strength.
Featured image from Unsplash. Charts from TradingView.