Chainlink Price Outlook: Can Fundamentals Outweigh Technical Pressure?

Chainlink price has been in a freefall in the past few months, making a series of lower lows and lower highs. It was trading at $13.50 on Thursday, down by 51% from its highest level in August, and is hovering near its lowest level since July 9. So, will its strong fundamentals outweigh its technical risks?

Chainlink Price is Facing Serious Technical Pressure

Likemost altcoins, Chainlink price is facing major technical pressure that may lead to more downside in the near term.

One of the most notable risks is that the price has formed a death cross pattern, which occurs when the 50-day and 200-day Exponential Moving Averages (EMAs) cross each other. This happened on November 7. This pattern typically leads to further downside, as it indicates that the downtrend is gaining momentum.

The token then flipped the important support level at $17.95 into a support. This was a crucial level, as it represented the highest swing in May this year and marked the neckline of the double-bottom pattern at $11.

Chainlink has remained below the Supertrend indicator, indicating that bears continue to be in control. Also, the Average Directional Index (ADX) has jumped to 36, its highest level since August 25, a sign that the downtrend is gaining momentum.

Additionally, the coin formed a head-and-shoulders pattern whose head was at $27.90, shoulders were at $20 and the neckline was at $15.

Therefore, the most likely Chainlink price forecast is bearish, with the next key support level to watch being at $10.98, its lowest level in June this year. This target is about 20% below the current level.

The bearish Chainlink price forecast will become invalid if it moves above the important resistance level at $15.50, the neckline of the head-and-shoulders pattern.

Chainlink Has Some Top Fundamentals in Crypto

The bearish Chainlink price forecast is based on its technical analysis and the reality that we are in a crypto bear market, which is affecting even the strongest tokens, such as Bitcoin and Ethereum.

Chainlink has some of the best fundamentals in the crypto industry as Grayscale recently wrote in a lengthy report. In it, the authors noted that Chainlink was the critical connecting tissue between crypto and traditional finance.

They noted that, despite intense competition, it was difficult to imagine how crypto can go mainstream without using its suite of software technologies.

While Chainlink is known for its role in the decentralized finance (DeFi) industry, Grayscale believes that its emerging role in real-world asset (RWA) tokenization will be the real deal because of the potential market size. Some of the top assets that will be tokenized using Chainlink’s technologies are residential real estate, fixed income, equities, and listed derivatives, among others.

Grayscale believes that key Chainlink technologies, such as proof of reserves, an automated compliance engine, data feeds, and a cross-chain interoperability protocol (CCIP), are already playing a major role in the tokenization industry.

Meanwhile, the supply of LINK tokens on exchanges has continued to decline over the past few months. There are now 217.4 million tokens in circulation on exchanges, a 27% decrease in the last 30 days.

There were over 307 million tokens in exchanges at the peak in October, a sign that investors are no longer selling their tokens. Falling LINK tokens on exchanges is a sign that investors are buying them.

Chainlink whales are buying the dip. Nansen data shows that these whale investors now hold 1.97 million LINK tokens, up from the low of 1.69 million this month. That is a sign that these investors anticipate that the price will rebound.

The other potential catalyst for the LINK price is that there is a chance that the Grayscale and Bitwise Chainlink ETFs will be approved soon.

It could be a sign that they are dollar-cost averaging, a process where investors buy a falling asset in increments with the hope that it will rebound over time.