LINK Dumps, Drops 12% as Bears Aim at $7

The Chainlink project is a cog that keeps DeFi going. With over 30 unique protocols sourcing price feeds from the decentralized oracle, traders often watch how the LINK price performs.

If anything, it has been dismal. Digital asset prices are dropping like a stone. Considering how DeFi is sensitive to the Ethereum price, there are hints of a dump down judging from the movement of the total value locked—or under management, by different DeFi protocols.

At the time of writing (Dec 9),  the Chainlink price is down eight and 12 percent in the past 24 hours and week-to-date, respectively. It is also ceding ground versus the BTC and ETH within the same period.

Chainlink (LINK) Price Overview

Undoubtedly, the tokens of leading DeFi dApps have had a spectacular year. With some posting over 10X in the past three quarters, the LINK price was no exception.

Losses are not as steep since the token is not coupled with the Ethereum price like those in lending or liquidity provision. As long as there is a need for a reliable, battle-tested decentralized oracle provider, Chainlink will lead, and the LINK price will benefit from the demand.

However, even with Chainlink being a leader in the Oracles sector, its token has been battered. At $12, prices are retesting a multi-week resistance line after falling from $16—Nov 2020 highs.

Still, prices are trending within an ascending channel with clear support and resistance. While there is bullish sentiment, in the immediate term, sellers have the upper hand.

Notably, if bulls sink below the support trend line, it will confirm bears of late November 2020.

Chainlink (LINK) Market Movers

Fundamentals are strong.

Already, Chainlink VRF has partnered with Sony’s PS5.

Limited Edition #Chainlink Playstation 5 Giveaway

I'm Giving Away a #PS5.
To Celebrate @PlayStation partnership with Chainlink VRF.
To Win the giveaway.
Like 👍
Retweet "I ❤️ Chainlink"
Leave A Comment Below.#eth2 #Ethereum #bitcoin #btc #eth #PlayStation5 #PlayStation pic.twitter.com/ZRwtHKF87x

— Junko Suzuki (@JunkoSu22993224) December 5, 2020

The exploitation of flash loans (viewed more as a tool than a weakness) by hackers spiked in November. Accordingly, Aave is partnering with Chainlink,  specifically launching a UNI/ETH decentralized oracle.   Other DeFi protocols can integrate to create UNI markets.

On the development front, they have announced the Chainlink Builders program and partnered with Polkadot in an alliance to expand the DeFi ecosystem in the interoperable Blockchain under the Thousand Validators Program.

⚡️@Polkadot starts Polkadot Thousand Validators Programme in December 2020! pic.twitter.com/rgGxZvcY4s

— Polkadot News (@polkadotnews) December 3, 2020

Chainlink will be one of the founding members.

Chainlink (LINK) Price Prediction

Technically, the Chainlink price is trading within a bullish breakout pattern.

Temporarily, it seemed like bulls will recover after falling to $7—the 78.6 percent Fibonacci retracement level of the July to September trade range. However, bulls have been fickle, and bears are taking charge.

At spot rates, bears are retesting the main support trend line. Even so, there are hopes. While a bear confirmation forcing prices below $11 confirms the three-bar bear reversal pattern of Nov 23 to 25, today’s bar has a long lower wick. This hint of support and bullish movement in lower timeframes.

A high-volume recovery back above $14, reversing losses of the conspicuous bear bar of Nov 26, could draw more buyers, pushing prices back to $16.

On the other hand, losses below $11—lows of Nov 26, would signal bear trend continuation and a possible sell-off back to $7 in line with the trend set in late Aug 2020.

In this case, immediate bear targets will be at $10 and $7, respectively.

Chart Courtesy of Trading View

Disclosure:  Opinions expressed are those of the author. Do your research.