Back to basics for Chainlink. Bulls have to defend $6 before a further crash happens.
Chainlink traded at $6 on Monday, stabilising at the crucial support
LINK buyers have always defended $6 against the onslaught of bears
LINK could fall further if a break in the crucial support happens
The start of Chainlink staking ignited an interest in the native token LINK. The cryptocurrency was on an uptrend in the last two weeks of November, ahead of the crucial milestone in early December. But as the early access kicked off, LINK has failed to register gains. Instead, the token has succumbed to the bear market. Bulls are battling $6, as the price now faces a brutal collapse if bears win. But will this happen?
Chainlink price outlook and analysis
$6 is an important price level for Chainlink. Past price action shows that bulls have defended this crucial level since June. The level has been tested severally, offering clues that LINK could overcome a further slump.
Nonetheless, there is no price action signal to support a recovery up to this point. From the daily chart below, multiple inside bars are forming at the crucial level, underlying indecision in the market. Since this happens in a bear market, it signals the exit of sellers or the entry of buyers.
From a technical outlook, LINK trades below the 20-day and 50-day moving averages. The moving averages have almost been flat, indicating that LINK is better considered to be in an extended consolidation. The cryptocurrency is recovering slightly, although the RSI signals that bears remain in control.
Will Chainlink recover?
The next price action will shape the direction of Chainlink. LINK price has stabilised at $6, but the bear pressure is still on. If the cryptocurrency loses this support, a lower price of around $5.4 will remain in sight.
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