Chainlink Incurs Strong Selling Pressure, Risks Losing The Uptrend

Chainlink incurs a strong selling pressure despite the fact that it was one of the most bullish cryptocurrencies between 2019 and 2020. Chainlink incurs a strong momentum that was able to maintain in spite of the market-wide weakness that we witnessed over the past few weeks.

The altcoin is now at risk of losing the gains from the latest uptrend and is facing some intense selling pressure along with Bitcoin and most of the other cryptocurrencies. The analysts are now eyeing a few key levels that could act as strong support in the near-term but one trader is noting that the loss of this level could nosedive the cryptocurrency. At the time of writing, Chainlink is trading down by 6 percent and has a current price of $3.16, marking a notable decline from the daily highs of $3.40.

The weak performance led LINK to underperform Bitcoin by 4 percent since the number one cryptocurrency traded down marginally, inching towards the key support of $6,600. The weakness of Chainlink came on the heels of the recent uptrend that was seen over the past few weeks, allowing the cryptocurrency to rally from the lower $2.00 region to $3.50. The latest price increase was sparked by the breakout of the bull pennant that started earlier this month but it is now in a bigger risk of being invalidated as the cryptocurrency tests a key trendline. One popular analyst spoke about the rest of the trendline saying that the breakout is losing strength which could lead to invalidation of the overall uptrend:

 “Breakout starting to lose strength – relatively close to invalidation.’’

If the uptrend is invalidated in the upcoming days, analysts believe that they will see the first key support region between $2.75 and $2.90. He also noted that the break below this support region will also lead the entire cryptocurrency to drop in value before it is able to reach a next key support level around $2.20:

 “Chainlink: Also starting to drop, as it’s heavily correlated with the movements of BTC. For potential longs I’d be watching the .
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75-2.90 level. Losing that and we can nosedive towards $2.20-2.25 as next target zone.’’

Chainlink has a tendency of underperforming Bitcoin when downtrends start but it also knows how to outperform during uptrend so this selloff could cut deeper if BTC shows more signs of weakness.