Chainlink (LINK) Plunges 9% as Fed Hawkishness Triggers Crypto Selloff
Luisa Crawford Aug 01, 2025 11:23
LINK drops to $16.43 amid bearish momentum, testing crucial support levels while RSI remains neutral at 46. Fed rate signals spark risk-off sentiment across crypto markets.
Quick Take
• LINK currently trading at $16.43 (-9.03% in 24h) • Bearish MACD histogram signals weakening momentum for Chainlink • Federal Reserve's hawkish stance on elevated rates triggers crypto market retreat
What's Driving Chainlink Price Today?
The LINK price has experienced significant pressure over the past 24 hours, primarily driven by macroeconomic headwinds stemming from the Federal Reserve's recent commentary. On July 30, the Fed signaled that interest rates would remain elevated for an extended period, creating a risk-off environment that particularly impacted growth-oriented assets like cryptocurrencies.
This hawkish pivot has overshadowed earlier bullish sentiment that emerged on July 26, when Chainlink surged from $17.48 to $18.49 following a breakout above prior resistance levels. Despite analysts' optimistic projections suggesting LINK could reach $28 in August, the recent Fed-induced selloff has temporarily derailed this bullish narrative.
The current price action reflects broader market dynamics where institutional investors are reassessing risk exposure amid uncertainty about monetary policy. Chainlink's 30% gains over the previous month have been partially erased as traders take profits and adjust portfolios for a potentially prolonged period of elevated borrowing costs.
LINK Technical Analysis: Bearish Signals Emerge
Chainlink technical analysis reveals mixed signals with a bearish tilt in the short term. The LINK RSI currently sits at 46.04, positioning the token in neutral territory but leaning toward oversold conditions. This suggests that while selling pressure exists, Chainlink may be approaching levels where bargain hunters could emerge.
The MACD indicator presents concerning signals for LINK holders, with the histogram at -0.3475 indicating bearish momentum divergence. The MACD line (0.6226) remains above the signal line (0.9701), but the negative histogram suggests this bullish crossover is losing strength.
Chainlink's position relative to key moving averages tells a story of recent weakness. The current LINK price of $16.43 sits below both the 7-day SMA ($17.81) and 20-day SMA ($17.79), indicating short-term bearish pressure. However, the token remains above the critical 200-day SMA at $16.01, suggesting the longer-term uptrend remains intact.
The Stochastic oscillator shows extreme oversold conditions with LINK's %K at 3.75 and %D at 14.37, typically signaling potential reversal opportunities for contrarian traders.
Chainlink Price Levels: Key Support and Resistance
Based on Binance spot market data, Chainlink support levels are being tested as the token approaches critical technical thresholds. The immediate LINK support zone lies at $15.04, which aligns closely with the lower Bollinger Band at $15.45. A break below this level could accelerate selling toward the stronger Chainlink support at $10.94.
On the upside, LINK resistance emerges at the $20.28 level, which coincides with both immediate and strong resistance zones. This level represents a significant hurdle that must be reclaimed for any meaningful recovery. The 24-hour high of $18.08 provides an intermediate resistance level that could cap near-term bounces.
The pivot point at $16.93 serves as a crucial inflection zone. LINK price action above this level could signal stabilization, while sustained trading below may invite further downside pressure toward the $15.04 support.
Chainlink's Bollinger Bands indicate the token is currently in the lower portion of its recent trading range, with the %B position at 0.2088 suggesting oversold conditions that could attract value buyers.
Should You Buy LINK Now? Risk-Reward Analysis
For aggressive traders, the current LINK price presents a potentially attractive entry point given the oversold technical conditions. The risk-reward profile favors buyers willing to position for a bounce from the $15.04-$15.45 support zone, with initial targets at the $17.79 resistance level.
Conservative investors should wait for confirmation of support holding and signs of momentum reversal before establishing positions. A decisive break below $15.04 would invalidate the near-term bullish case and could trigger further declines toward $10.94.
Swing traders might consider scaling into positions if LINK price stabilizes above the 200-day SMA at $16.01, using this level as a stop-loss reference. The oversold Stochastic readings suggest potential for a technical bounce, but macroeconomic headwinds could limit the magnitude of any recovery.
Risk management remains paramount given the elevated volatility, with Chainlink's daily ATR of $1.15 indicating significant intraday price swings. Position sizing should account for potential further downside toward the $10.94 support level.
Conclusion
Chainlink faces near-term headwinds as Fed policy uncertainty weighs on risk assets, pushing the LINK price below key short-term moving averages. While technical indicators suggest oversold conditions that could attract buyers, any meaningful recovery will likely depend on broader market sentiment stabilizing. Traders should monitor the critical $15.04 support level and the 200-day SMA at $16.01 for signs of either capitulation or stabilization in the next 24-48 hours.
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