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Chainlink Price Falls 16% in June – Wave Count and Pattern Predict New LINK Lows

Last Updated June 11, 2024 2:32 PM
Valdrin Tahiri
Last Updated June 11, 2024 2:32 PM

Key Takeaways [/focus-text-wrap]

  • The LINK price decreased since its yearly high in January and created a lower high in May.
  • LINK has possibly created bearish head and shoulders pattern with a neckline at $13.
  • If Chainlink breaks down from the pattern, where will the next area of support be?

The Chainlink price has fallen since creating a lower high on May 29. So far in June, it has decreased by 16%, leading to a low of $15.30. During the decline, LINK broke down from a horizontal support and invalidated a bullish wave count.

There is a bearish pattern that has been developing since November 2023. The ongoing decrease makes a potential breakdown likely, with the key level being at $13. Will LINK break down below this support, or will it bounce and keep its bullish hopes alive?

LINK Falls After Rejection From Long-Term Resistance

The weekly time frame LINK chart shows the price has fallen since the 0.,382 Fibonacci retracement resistance level rejected it in March (red icon). While LINK bounced the next month, it created a lower high and a bearish engulfing candlestick in May (red circle). The main horizontal support area is at $13, a level that has stood since October 2023.

The RSI and MACD are also turning bearish alongside the decline. The indicators are both trending downward, and the RSI has generated a bearish divergence (green).

An RSI decline below 50 combined with a price breakdown below $13 will confirm the trend is bearish. In that case, the next support level will be at $9.

LINK Price Lower High
LINK/USDT Weekly Chart | Credit: TradingView

The daily time frame chart gives a bearish outlook. This is because Chainlink has created a bearish head and shoulders pattern. The pattern is being created since November and has an ascending neckline at $13.

LINK seems to be completing the right shoulder of the pattern, after which the breakdown can ensue.

LINK Head and Shoulders
LINK/USDT Daily Chart | Credit: TradingView

The daily time frame MACD and RSI also suggest a breakdown is likely. The indicators have both broken down from their support trend lines (green) and they are below 0 and 50, respectively.

If the LINK price breaks down, it will confirm the downward movement toward the $9 horizontal support area as outlined previously.

LINK Wave Count Predicts New Lows

Finally, the wave count aligns with the bearish readings, implying that new lows are in store. The most likely wave count suggests LINK has started wave C in an A-B-C corrective structure. The structure comes after a five-wave increase (white) that encompassed the second half of 2023 and continued until March 2024.

Wave C is the final leg of the correction and perfectly aligns with the creation of a bearish Chainlink head and shoulders pattern.

Giving waves A:C a 1:1 ratio lead to a low of $8.20. However, there is intermediate support at $10.50, a level that can also act as the low.

LINK Wave Count
LINK/USDT 2-Day Chart | Credit: TradingView

Despite this bearish LINK price prediction, an increase above the B wave high of $19.22 will mean that the trend is bullish instead. At the current time, this seems unlikely.

Chainlink Price Likely to Fall to New Lows

The Chainlink  decrease in June could be a sign of things to come. The price action, wave count and indicator readings all imply the trend is bearish. A breakdown from the neckline of the bearish Chainlink pattern at $13 will confirm this downward movement and can trigger a drop to at least $10.50.

Disclaimer
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.
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