- Chainlink price has formed a bearish flag pattern on the 4H chart.
- Global stocks and bond yields pulled back sharply on Thursday.
- Chainlink’s total value secured has dropped to $10 billion.
Chainlink price drifted downwards on Thursday as investors focused on the performance of the financial sector. LINK, the native token for the platform, dropped to a low of $6.50, which was lower than this week’s high of $7.20.
Volatility rises, stocks retreat
The retreat of the LINK prices coincided with the overall rise of market volatility. The closely watched VIX index, which I wrote about here, rose by more than 2.7% to $26.87. In the same period, the Dow Jones fell by over 200 points while bond yields slipped. The 10-year bond has a yield of 3.37% while the 2-year has moved from last week’s high of 5% to about 3.91%.
This price action is a sign that the actions by Swiss and American regulators have done nothing to calm the market. On Wednesday, the Swiss National Bank announced that it will set a $54 billion facility for Credit Suisse, the third-biggest bank by market cap. Earlier on, the Federal Reserve created a backstop for Silicon Valley Bank and Signature Bank customers.
Read more: How to invest in Chainlink.
The Chainlink price also declined after the European Central Bank (ECB) decided to hike interest rates by 0.50%. Most analysts were expecting the second-most-powerful central bank to hike by 0.25% in a bid to balance its fight against inflation and financial stability.
All these macro factors have an impact on Chainlink and other cryptocurrencies like Bitcoin, Ethereum, and Polkadot. Indeed, Bitcoin pulled back to $24,800 while Ethereum fell to $1,657.
Meanwhile, other data shows that Chainlink’s ecosystem is struggling. Data compiled by DeFi Llama shows that the total value secured (TVS) has dropped to about $10.6 billion. At its peak, the TVS stood at over $60 billion. Most DeFi chains in the ecosystem like AAVE, Compound, and Frax have shown some outflows recently.
Chainlink price prediction
The 4H chart shows that the LINK price rose to a high of $7.23 earlier this week as Bitcoin rose to a high of $26.500. It then quickly retreated and dropped to a low of $6.38. The coin has moved below the 25-day and 50-day moving averages.
It has also formed a bearish flag, which is usually a bearish sign. Therefore, there is a likelihood that the coin will continue falling, with the next key support level to watch being at $6.40.
