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On July 8, Chainlink pricing formed a bear flag pattern, resulting in a 14 percent drop as of today’s low.
The 14-day Average True Range (ATR) indicator is now at its lowest level since the start of 2021, according to LINK.
If the downturn continues, the lows of May 23 and June 22 will provide significant support.
Since the May peak, the price of chainlink has been in a rapid decline, interrupted by a brief jump from the May 23 low. Following the breakdown from the bear flag pattern, the decline has resumed, positioning LINK for lower pricing. Still, the size of the decline will be determined by outstanding support at $15.00 and interference from waning negative intent.
The Average True Range (ATR) is a volatility indicator that indicates the level of interest in a price move. It is not a directional indicator. Huge ranges or large True Ranges are typically associated with impulsive moves, whether up or down. Corrective swings frequently reflect fading enthusiasm, implying a waning enthusiasm driving a market increase or breakout. As a result, a bullish reversal with an increase in ATR displays emotion and dedication, enhancing the price action’s profile. A bearish reversal with an increase in ATR, on the other hand, suggests a stampede for the exits and reinforces the trend.
The 14-day ATR has been drifting lower in the case of Chainlink price since the milestone high following the May crash, indicating a gradual drop in the bearish sentiment underlying the weaker price. In fact, the LINK ATR reading is at the same level as it was at the start of 2021, indicating that a small rebound is likely in the following days or weeks.
Nonetheless, the decrease from the bear flag pattern with two measured move price targets is the guiding price structure for LINK. The first is the pattern trough at $15.00, which represents a 20% drop, or $10.89, or a 40% drop from the pattern entrance price. The 40 percent movement is calculated from the trough to the peak of the flag.
With a daily close above $19.00, Chainlink price can avoid the aforementioned possibilities. It would set up a challenge of the declining 50-day simple moving average (SMA) around $22.34, where the bearish Death Cross pattern, which was triggered on June 30, would likely halt the advance and usher in some sort of consolidation. LINK speculators will be rewarded with an 18 percent return from $19.00.

USD/LINK daily chart
Assume the price of Chainlink is influenced by a more stable cryptocurrency complex. In that case, it’s possible it’ll break through the 50-day SMA and head for the flattening 200-day SMA at $27.40. However, it would need to be accompanied by a surge in LINK traffic in order to attain the long-term stability required to advance another five points.
The significant reduction in volatility, as evidenced by the lowering 14-day ATR, suggests that the correction’s bearish severity is waning. As a result, Chainlink’s price may be easily encouraged to reverse the current bear flag pattern’s decrease. The digital asset is directed by the bearish tone generated by the dominant pattern until LINK may recover $19.00 on a daily closing basis./nRead More

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