Chainlink LINK surges 11% but faces bearish reversal risk

Chainlink (LINK) has recently shown mixed technical signals, with some indicators suggesting a bearish trend while others point to potential upside. Over the past week, LINK's price has increased by 11%, positioning it to potentially surpass Pi Network in market capitalization. However, this momentum may be delayed as several technical indicators reach critical inflection points.

According to Chainlink’s Directional Movement Index (DMI) chart, the Average Directional Index (ADX) has decreased from 26 to 20.46. This decline indicates a weakening trend strength, suggesting that the previous strong trend is losing momentum and shifting toward a more neutral or ranging market. The Positive Directional Indicator (+DI) has fallen from 33.3 to 20.1, while the Negative Directional Indicator (-DI) has increased from 14.2 to 21. This crossover, with -DI now exceeding +DI, suggests a potential shift from bullish to bearish momentum. Combined with the weakening ADX, this technical picture points to a likely bearish reversal or continuation pattern forming for LINK’s price. Traders might anticipate further downside pressure in the near term, though they should monitor for stabilization or reversal signals as the trend weakens. If ADX continues to decline below 20, LINK may enter a period of consolidation rather than strong directional movement.

On the other hand, LINK’s Bollinger Bands Trend (BBTrend) indicator has turned positive, reaching 3.69 after remaining in negative territory since March 4. A significantly negative reading of -20 was recorded on February 28. The BBTrend indicator measures the relationship between price and Bollinger Bands to identify trend strength and direction. When BBTrend is positive, it suggests prices are moving above the middle band and potentially toward the upper band, indicating bullish momentum. Conversely, negative readings suggest bearish pressure with prices moving below the middle band toward the lower band. The recent shift to a positive 3.69 BBTrend value for LINK could signal emerging bullish momentum after a period of downward pressure. However, traders should confirm this signal with other indicators, as the relatively modest positive reading of 3.69 suggests the bullish momentum is still developing rather than strongly established.

LINK’s Exponential Moving Average (EMA) lines are currently trending downward, potentially forming