Chainlink faces resistance as price struggles to maintain breakout

On August 26, Chainlink (CRYPTO:LINK) surged to $12.55, signaling a potential breakout for the altcoin.

However, despite the initial upward momentum, LINK faced strong resistance, pulling its price back to $11.25.

This suggests that LINK's attempt to break higher is currently challenged by several technical factors, pointing to a bearish outlook in the short term.

Chainlink has been trading within a symmetrical triangle pattern on the daily chart.

This pattern, formed by two converging trendlines—one sloping upwards connecting lower lows and the other sloping downwards connecting lower highs—usually indicates potential price consolidation.

Depending on subsequent price movement, LINK could either break out upwards or continue trading within the triangle's range.

Despite defending the $9.95 support level earlier in the week, LINK's price retreated after encountering resistance near $12.55.

The Ichimoku Cloud, a technical indicator used to identify support and resistance levels, shows the cloud above LINK's price.

This suggests that significant resistance could prevent LINK from advancing beyond the $11 region in the near term.

Further analysis shows that LINK is trading close to its 20-day Exponential Moving Average (EMA) but remains below the 50-day EMA.

Being below the 50-day EMA indicates a lack of strong bullish momentum for a breakout.

Additionally, the Fibonacci retracement tool identifies a key resistance point at $12.33, aligning with the 38.2% retracement level, which supports the likelihood of continued range-bound trading.

If LINK fails to break above this resistance, its price could dip back to the $10.71 support level.

However, if buying activity increases, LINK could challenge the bearish trend and potentially aim for a rise to $13.65.

Traders should closely monitor these levels and overall market sentiment to determine the next moves for Chainlink.

At the time of writing, the Chainlink price was $11.01.