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Chainlink (LINK) Price Shows Signs of Weakness, Is A Sell-off Happening?

The price of Chainlink (LINK) has bounced up from the previous significant resistance zone but is currently showing short-term signs of weakness. This might lead to a sharp price decline and nullify the recent breakout.

Short-Term Weakness

The price of Chainlink (LINK) declined after being rejected by the short-term horizontal resistance zone at $23 yesterday (red arrow).

The rejection was supported by a bearish divergence in the daily RSI indicator. This occurs when the price’s upward movement is not supported by momentum and often leads to a correction.

In addition, the fact that the RSI is sloping down also shows weakness.

Therefore, there is a possibility that the LINK price will retest the previous long-term resistance zone at $18 once again.

Breaking below this zone could lead to a significant drop to the next important support level at $13.

LINK/USDT daily chart. Source: TradingView

Weekly Outlook

The weekly chart shows that LINK formed a bullish fakey pattern after bouncing from the previous resistance zone at $18 last week (green box).

This pattern often indicates a continuation of the uptrend and suggests that the bulls are strong buyers as the price dipped to $18.

The weekly RSI indicator has broken above the descending divergence line and maintained above it, implying that the advantage still lies with the bulls.

Therefore, the short-term weakness may lead to a temporary decline. Afterward, the LINK price could continue to rise towards the next long-term resistance zone at $28, which is 38.53% higher than the current price.

LINK/USDT weekly chart. Source: TradingView

Conclusion

The most likely scenario suggests that the LINK price will continue to rise towards the long-term resistance zone at $28 after the short-term correction concludes.

Disclaimer: Please note that this article is for informational purposes only and should not be taken as investment advice. As an investor, it is important to do your own research before making any decisions. We are not responsible for any investment decisions you make based on this information. Not Financial Advice.

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