Chainlink price risks sharp drop to $11 as symmetrical triangle support gives way

Chainlink price is testing a critical support level as bearish technical signals emerge, raising the risk of a breakdown toward the $11 zone.

Chainlink price technical analysis

Chainlink (LINK) price has just wicked below the ascending trendline support, which marks the lower boundary of a symmetrical triangle that has contained price action since the October 10 flash crash to $15. Symmetrical triangles indicate market indecision, as they reflect a battle between bulls (lower highs) and bears (higher lows), meaning the price can break out in either direction.

The BBWP (Bollinger Band Width Percentage) indicator — which tracks volatility expansion and contraction — has just seen its volatility line cross above the moving average from an extreme low zone. This crossover often precedes a major move and given that LIINK has wicked below the triangle’s support trendline, the setup currently leans bearish.

If confirmed with a daily candle close below $16.50, Chainlink price could risk a measured move decline toward $11.30, derived from the triangle’s maximum height of $5.20 (subtracted from the breakdown level at $16.50).

The bearish technical setup for Chainlink price contrasts sharply with a backdrop of strengthening fundamentals.

Circle, the issuer of the USDC stablecoin, has recently launched the testnet of Arc, its stablecoin-focused layer-2 network. Chainlink will be one of the technology providers for the network, providing its developers with oracle solutions. 

Additionally, Grayscale’s September filing to convert its existing Chainlink Trust into a spot ETF — potentially trading under the ticker GLNK — could act as a medium-term catalyst, attracting speculative capital and reinforcing bullish sentiment if the ETF application advances through the SEC review process.