Chainlink (LINK) has by far been one of the most bullish cryptocurrencies throughout both 2019 and 2020, with the crypto rallying to highs of nearly $5.00 in mid-February, which is around when the aggregated market lost its momentum and began to crater.
This market-wide downtrend has proven to be devastating for virtually all cryptocurrencies’ market structures, but it is important to note that it has been particularly impactful to LINK.
In the near-term, one top analyst is noting that the crypto is currently in a precarious position that could ultimately allow it to see a significant bout of capitulation in the days and weeks ahead.
Chainlink Grinds Lower as Crypto Market Shows Signs of Weakness
Bitcoin has been firmly guiding the cryptocurrency market over the past several days and weeks, which has made all altcoins prone to seeing significant downside.
Chainlink – which set fresh all-time highs last month – has been particularly impacted by this market-wide downturn, plummeting from highs of nearly $5.00 to lows of under $1.60 that were set at the bottom of its recent selloff.
At the time of writing, Chainlink is trading down just under 10% at its current price of $2.25, which marks a massive decline from daily highs of $2.60, but a notable rally from its recent lows.
Although Bitcoin is currently trading down 40% from its year-to-date highs, LINK is trading down nearly 55% from its highs, meaning that it has underperformed BTC by roughly 15%.
Chainlink is now trading right around where it started the year, with the recent selloff erasing the unprecedented gains incurred throughout January and February.
Analyst: LINK Positioned to See Notable Selloff as Market Structure Degrades
Crypto Michaël, a prominent cryptocurrency analyst on Twitter, explained in a recent tweet that he believes Chainlink is positioned to see some weakness against its Bitcoin trading pair, setting a downside target at roughly 27100 sats, which marks a notable decline from its current price of 36300 sats.
“Chainlink: Doesn’t look great here. Bounced on support, but first resistance at 37500 couldn’t break. Losing 34000 and I’ll target 31200 and 27100 satoshis as next levels. Breaking 37500 and we can rally to 42000-43000 satoshis.”
If Bitcoin fails to extend its current momentum, it is highly probable that altcoins like Chainlink could continue to underperform the benchmark crypto, potentially leading it to see significantly further downside.
Featured image from Shutterstock.