Chainlink’s bullish revival depends highly on Bitcoin recovery (and Chainlink 2.0 success)

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• Chainlink’s daily chart analysis review is bearish.
• LINK’s dependence on Bitcoin could result in further losses, should the market fail to recover.
• Could 2.0 protocol save the situation?

Yerevan (CoinChapter.com) – Chainlink’s native token LINK fell victim to the new bearish wave across the crypto market. As Bitcoin lost 4.24 percent in the past 24 hours, LINK declined by 11 percent and traded at $17 in Tuesday’s London session.

Chainlink daily chart

LINK dropped below the significant support margin of $19.7, which managed to keep it afloat after the May 19 decline.

The token unsuccessfully retested the said line and has now reached its lowest value since mid-January 2021. Its next crucial support lies at the $16 price margin.

Technical analysis conducted by AMBCrypto cited Bollinger bands indicator for the LINK price review. The indicator is used to adjust to volatility swings in the underlying price. The analysis stated that the bands converged slightly in the past sessions, and the basis was in the resistance position moving above the candlesticks.

According to the Squeeze Momentum Indicator, LINK has been under great bearish pressure, shifting the coin to active squeeze status.

Also read: Chainlink’s LINK One Break Away from Pumping 15% — Here’s Why

LINK vs BTC

The Chainlink token depends on the fluctuations on the Bitcoin charts, which was proven on multiple occasions.

When BTC registered a 21 percent decline February 21-28, LINK followed suit with a 28 percent drop during the same period. A similar positive correlation occurred April 16-25. The alpha crypto lost 22.5 percent, while LINK complied, declining by 27 percent. From May 9 through May 19, Bitcoin lost 37 percent of its value, while Chainlink declined by 50 percent.

If the past is any indication, should BTC fail to recover from the crash and continue the descent, LINK might follow suit and eye further losses. However, Chainlink also has fundamental developments to lean on.

Also read: Bitcoin week ahead Ep08: Early Monday sell-off towards $32K spells trouble

Chainlink 2.0

Chainlink 2.0 is a new protocol introduced by the company back on April 15. The whitepaper contains various improvements for smart contract developers and applications. It states: “Decentralized Oracle Networks will create a decentralized meta-layer that enhances smart contracts with highly scalable, confidential, and secure forms of off-chain computation, in addition to the external data feeds that Chainlink powers today.”

The paper defines a new way for building hybrid smart contracts. Decentralized Oracle Networks offers all of the capabilities that blockchains cannot. It will give the users the best of two worlds, serving as an off-chain computation layer tied to the blockchains for security, and operating with the scalability of off-chain systems simultaneously.

Chainlink 2.0 could act as a crutch for LINK during the recent avalanche. However, time will show if the protocol will be enough to keep the token afloat.

Also read: Mirror Protocol (MIR) ministers gains despite the crypto market crash

Chainlink suffered considerable losses in confluence with Bitcoin and the rest of the market. Its token LINK traded at $17.0 in the European session Tuesday. The daily chart showed a correlation between LINK and BTC, hinting at more losses should the Bitcoin decline continue. Chainlink also has blockchain developments in action, which could remedy the bearish situation.

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