For nearly 500 days, Chainlink (LINK) has been in a so-called “crab market”, a term referring to an asset’s prolonged sideways movement.
From March 2022, LINK’s price began trading at around $15 and reached a brief high of $16, then dropping to a low of $5 in June 2023. As of August 28, 2023, it stands at approximately $7, showing no significant upward trend.
Such prolonged stagnation can negatively impact a digital asset by diminishing investor interest and prompting theories about price manipulation. But no manipulations is behind Chainlink price movement.
Nevertheless, Chainlink’s fundamental utility remains strong as it bridges smart contracts with real-world data, essential for numerous DeFi projects, insurance contracts, and games.
While doubts about Chainlink’s price behavior have been addressed, its revival will likely need increased adoption, strategic partnerships, and favorable DeFi market trends. The growing need for reliable Oracle services in the evolving crypto landscape could set Chainlink up for a potential rise.
Can LINK price start to bounce back and finally break out from this sideways range?
In our last analysis covering the price of LINK, we anticipated a slight rise above $8, followed by a large drop to around $6.50. According to this bullish scenario, the price started its bullish five-wave impulse on June 10, when it made a low of $4.85.
The significant drop was expected as the initial corrective wave of the larger-degree impulse move, which would eventually propel the price to break out above its sideways range.
Despite observing a similar price path, this has begun to invalidate our assumption. Firstly, there hasn’t been any interaction with the $9 level, which represents the upper horizontal resistance level seen at another minor high.
Instead, wave 4 has made further downside movements and surpassed our expected target, going below $6. From June 10, we may have seen the start of a bullish impulse. But with a failure to reach a minor higher high and the expected retracement being prolonged, this possibility is weak.
To maintain a positive outlook, LINK price now needs to hold above the 0.786 Fibonacci retracement level at $5.75. If we see a bounce at that leve and the price starts increasing again, a breakout may happen.
If it keeps moving down, it means the previous upside movement was part of a sideways range now prolonged further.
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.