Will Chainlink (LINK) Coin Fall More in 2024?

NAIROBI (CoinChapter.com)— Chainlink (LINK) is currently facing potential downside risk as the coin forms a bear flag pattern on its daily chart, which could indicate further price declines. This pattern follows a steep drop in LINK’s value from around $15 in mid-April to just under $9 by early Aug., marking a clear downtrend.

As of Aug. 27, LINK USD is trading at around $11.64, reflecting a 5.09% decline over the past 24 hours. This drop aligns with the bearish outlook indicated by the bear flag pattern on the daily chart, suggesting a potential continuation of the downtrend if the lower boundary of the flag is breached.

Bear Flag Pattern Points to Further Downside

Chainlink (LINK) appears at risk of further decline, as the token forms a classic bear flag pattern on its daily chart.

After the initial sharp drop, LINK’s coin price consolidated within an upward-sloping channel, forming the ‘flag‘ portion of the pattern. A break below the lower boundary of this channel could trigger a further decline.

LINK’s price has been moving within an upward-sloping channel following a sharp drop from mid-June to early August 2024.

The Relative Strength Index (RSI) is around 55, indicating neutral momentum but with room for movement in either direction. However, if LINK breaks below the flag’s lower trendline, the next key support to watch is $8.24—a level that aligns with the flagpole’s height and could indicate the magnitude of the next drop.

Adding to the bearish sentiment, LINK’s derivatives data shows a 19.56% drop in trading volume to $338.01 million and a 9.96% decrease in open interest to $153.78 million. This suggests traders are pulling back, reinforcing the potential for further downside.

Can Chainlink’s Sony Partnership and Fed Decision Save LINK from Further Decline?

Chainlink’s crypto market outlook is closely tied to the U.S. Federal Reserve’s monetary policy, but its recent partnership with Sony Group significantly boosts its potential adoption.

Sony, a $115 billion multinational conglomerate, has selected Chainlink as the launch partner for its new Ethereum Layer 2 (L2) blockchain, Soneium. This collaboration positions Chainlink at the forefront of a major blockchain initiative, which could drive adoption in key markets like Japan and potentially globally.

Eid Johann, Chief Business Officer at Chainlink Labs, noted that this collaboration showcases Chainlink’s technology and its potential to impact the blockchain industry.

Despite this partnership’s potential, LINK’s price remains under pressure from broader macroeconomic factors. The Fed’s expected decision to maintain interest rates at 500-525 basis points, with a 71.5% probability, could limit any immediate positive effects from the Sony partnership. However, a possible rate cut, though less likely, might provide some market relief.