Chainlink may have rebounded with a record-breaking single-day rally, it did so after a 60% fall from its all-time high set just over a month ago.
A key indicator measuring momentum has flipped bearish on weekly timeframes for the first time since the parabola began. Is this a sign that momentum is about to slide further to the downside?
Chainlink Flips Bearish For First Time Since Parabolic Rally Started
Chainlink cryptocurrency tops the list of the industry’s best-performing tokens in 2020 and the years before it. Chainlink was launched during the bear market and has never had a drawdown phase like most other cryptocurrencies.
Even devastating flash crashes to nearly zero have always bounced back by stronger than ever, setting record high after the next.
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After breaking its previous record in May, the crypto asset went into full price discovery mode and reached a peak of $20 per LINK coin.
The cryptocurrency since crashed to just $8, then from there rebounded to $11 in a shocking record recovery rally. But before bulls begin celebrating, the weekly MACD could be signaling a major momentum change and that a deeper correction could be next.
LINKUSD Daily MACD Indicator Bearish Flip | Source: TradingView
Weekly Close Critical For Continuation, According To MACD Indicator
This week’s close in Chainlink is critical for the unstoppable cryptocurrency’s rally to continue. The MACD, the moving average convergence divergence indicator, has just flipped bearish on weekly timeframes for the first time since April.
The indicator flipping bullish in late April resulted in an over 500% climb to $20 per token. And now that the asset’s parabola is broken, a 60% correction may not be enough.
Chainlink’s weekly bull trend line is currently still holding, however, and the weekly candle has yet to close. If bulls can uncross the MACD moving averages within the next 24 hours, the altcoin could keep on climbing.
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At the same time that Chainlink is giving such a signal, so is Bitcoin, suggesting that a greater crypto market correction could be ahead of both assets collapse together.
Chainlink throughout its lifecycle has always shocked and surprised the industry with its astronomical rise. After such a strong rebound, regardless of what the MACD says, LINK could keep on climbing.
It’s also worth noting that the MACD is often considered a lagging indicator, which could mean this bearish crossover will be short-lived and another bull cross could happen within the next week or two.
Featured image from Deposit Photos, Charts from TradingView