Chainlink's 25% Plunge: Navigating Crypto's Volatility
1min read Chainlink, a leading decentralized oracle network, has experienced a significant price drop this week, with its value plummeting by more than 25%. This volatility highlights the inherent risks and uncertainties in the cryptocurrency market. As an investor, it's crucial to stay informed about the price dynamics and potential trends to make well-informed decisions.
From February 23rd to 28th, Chainlink's price exhibited a series of fluctuations, with key resistance and support levels being tested. On February 23rd, the price reached a weekly high of $18.15 before breaking out of its established channel to the downside. The following day, the price dropped further, forming a spike and channel trend. The Relative Strength Index (RSI) was already in the oversold area, indicating a potential reversal or pullback.
On February 25th, a golden crossover appeared, suggesting a possible reversal or pullback in the price. However, the price broke out from the trendline to the upside and formed a range, which subsequently broke out to the upside. This spike, however, failed to form a channel and instead created an expanding triangle, indicating range-bound behavior. The price tested the resistance level at $15.78 multiple times but failed to break it, while the lower end of the expanding triangle at $14.70 provided a support level that eventually broke to the downside.
As the price broke lower on February 28th, it pushed Chainlink to the low of the week at $13.45. The spike failed to form a channel and was immediately reversed, forming another spike in the opposite direction. This new spike to the upside also failed to create a channel and instead formed another expanding triangle, further exacerbating the situation.
If the expanding triangle breaks to the downside, further selling pressure could be seen in the price of Chainlink. If it breaks to the upside, the resistance level of $15.78 will be significant. Based on the current scenario, it is more likely that the bears will push the price lower and break the support level. As the Chainlink price is already in a downtrend, the two-week consolidation gave some hope to investors that the price might recover. However, this week's high volatility of Chainlink shows that selling pressure has not disappeared. Traders and investors should keep in mind that capital preservation is 