Just to add what Paulo has said, we have an [application link troubleshooting guide|https://confluence.atlassian.com/display/KB/Application+Links+Troubleshooting+Guide] that should give you a better idea of how application links work and how to troubleshoot them. Right now it seems that the two instances can't even communicate amongst each other.
This error means JIRA couldn’t complete the communication with Confluence.
I’ve found this another discussion on Atlassian Forum which is similar:
Can you check if there’s some firewall or proxy between Confluence and JIRA? This might causing this malfunctioning.
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