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After a significant decrease in May and June, the price of chainlink is forming a bear flag formation.
On June 30, a bearish Death Cross pattern formed, putting more pressure on the digital asset.
The 50-week simple moving average (SMA) of LINK has been trapped below it, adding to the stresses.
Since the June 22 low, Chainlink price has been discreetly scheming a bear flag pattern, enticing investors to buy LINK. Nonetheless, a break below the flag’s lower trend line will set off the pattern, bringing the May-June correction back into play.
Following a 70% drop from a high of $52.99 on May 10th, Chainlink price has made a corrective comeback, placing the cryptocurrency above the descending May trend line. However, the rally has not been impetuous, and as it progresses, volume has been gradually diminishing. As a result, the price of Chainlink has developed a bear flag pattern.
The fact that the pattern is developing below the 50-week SMA adds to the bearish LINK view. It’s the first time the moving average has fallen below it since March 2020, and it could signal a shift in the bigger uptrend of 2020 and 2021.
On June 30, when the 50-day SMA crossed below the 200-day SMA, Chainlink price created a bearish Death Cross pattern.
The bear flag pattern is expected to advance approximately 30%, with a final Chainlink price of $13.00. The slide would shattered the $15.00 support provided by the lows of May 23 and June 22, perhaps driving the daily Relative Strength Index (RSI) into oversold territory, laying the groundwork for a more substantial rebound.
The formation is triggered by a drop below the flag’s lower trend line, which is currently at $18.20. May’s falling trend line may provide some support, but the formation’s strength should propel Chainlink price to the measured move target of $13.00.

USD/LINK daily chart
The barrier vested in the 50-week SMA at $21.06 must hold on a closing basis to support the bear flag theory. If the moving average fails, the bearish view will be discredited, allowing Chainlink price to move higher, possibly testing the 50-day SMA at $23.45. In the short term, a rally to the 200-day SMA at $27.20 remains a low likelihood event.

Weekly chart of LINK/USD
Bear flag patterns are misleading because they run opposite to the downtrend, implying that the cryptocurrency (in this case) has bottomed and is about to go on a new, intentional rally. However, as soon as it appears to be heading in the right direction, the bears resurface, seize control, and aggressively decrease the price.
Chainlink’s price is currently reaching an inflection point in its bear flag pattern. Based on the present price structure, the odds are still in favor of a negative resolution, erasing the brief bright spot and returning LINK to the harsh reality of a bottoming process following a 70% drop./nRead More

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