Chainlink price remained under pressure on Friday, as the crypto market sell-off gained steam. LINK token was trading at $17.5, down by almost 40% from its highest point since August 22nd. Is it a good buy as the LINK reserves continue rising?
Chainlink Price Technical Analysis
The daily timeframe chart shows that the LINK token has been in a strong downward spiral in the past few days, mirroring the performance of other cryptocurrencies.
Chainlink price has moved from a high of $27.85 on August 22nd to the current $17.5. It has moved below the important support level at $19.82, its lowest point on September 25. That crash invalidated the forming double-bottom pattern.
LINK price has moved below the 50-day and 200-day Weighted Moving Averages (WMA), meaning that bears are now in control. The spread between the two is narrowing, a sign that it may form a death cross pattern, which often leads to more downside.
The Percentage Price Oscillator (PPO) indicator has moved below the zero line, while the Relative Strength Index (RSI) has formed a bearish divergence pattern. It has also dropped below the Supetrend indicator, which is a sign that the downtrend is continuing.
Therefore, the token will likely continue falling, with the next key support level to watch being at $14.96, its lowest level this month. A drop below that support will point to more downside, potentially to $10.
However, a move above the key resistance level at $19.82, its highest level on October 13, will point to more gains in the coming weeks.
Strategic LINK Reserves are Rising
The Chainlink price crash has happened despite some notable developments in the network. One of them is that the Chainlink team continues to accumulate LINK tokens as part of its strategic reserves. It bought 59,968 coins this week, bringing the total reserves to 523,159, which are now valued at over $9.2 million.
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This accumulation will likely continue in the future as the team has committed to use its on-chain and off-chain fees to boost its LINK tokens.
Meanwhile, whale investors have continued to accumulate LINK tokens in the past few days. They now hold 4.03 million tokens, up from 2.51 million on October 7. Whale buying is a common bullish catalyst for a cryptocurrency.
Chainlink has also continued expanding its ecosystem. On Tuesday, it announced a partnership with S&P Global to publish its stablecoin stability assessments. This is a major development as S&P Global is one of the biggest players in the financial services industry.
Chainlink has now partnered with hundreds of major companies in the financial industry as its advances the tokenization industry. Some of its partners are organizations like UBS, Re, Swift, and JP Morgan.
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