This article is also available in Spanish.
Chainlink (LINK) recently showed resilience after a 35% retracement from yearly highs, surging over 30% to test liquidity around the $23 mark. Despite this recovery, bearish sentiment continues to weigh heavily on altcoins and Chainlink is no exception. The cryptocurrency has struggled to recapture its local highs, raising questions about whether the recent rally has enough momentum to sustain further gains.
Related reading
Lead analyst Ali Martinez provided detailed technical analysis on X, highlighting a critical pattern that could dictate LINK’s next move. According to Martinez, Chainlink is forming a head and shoulders pattern, a structure often associated with bearish reversals. If this pattern is confirmed, LINK could experience a significant decline, potentially falling to as low as $14 in the coming weeks.
This technical setup places Chainlink at a crucial moment, where staying above current levels is vital to avoid deeper corrections. Investors and traders are closely monitoring the price action, with $23 as the key resistance level. Whether LINK can overcome bearish sentiment or succumb to further downside will likely depend on broader market conditions and its ability to invalidate the bearish pattern. For now, Chainlink’s prospects remain uncertain, keeping market participants on the edge of their seats.
Chainlink Price Action Shows Weakness
Chainlink (LINK) has faced a challenging pricing environment following its decline from yearly highs, reflecting broader bearish sentiment in the altcoin market. Despite showing some recovery, LINK’s price action remained limited, with significant resistance forming around the $26 mark. Restoring this level is essential to invalidate the bearish outlook and reignite the bullish momentum.
Lead analyst Ali Martinez recently shared a technical analysis on X, highlighting the potential formation of a head and shoulders pattern. This bearish setup, if confirmed, could send LINK tumbling as low as $14. Such a move would represent a significant downside from current levels and underline the challenges LINK faces in reclaiming its previous highs.
However, not all hope is lost. Martinez notes that holding above the $22 mark could provide a strong foothold for Chainlink to stabilize and potentially reverse the bearish trend. A decisive push above $27 would further strengthen the bullish momentum, signaling a potential return to a more optimistic outlook.
Related reading
For now, the market remains rife with indecision. Broader market conditions, including Bitcoin’s performance, will likely influence LINK’s direction. If LINK can successfully break above these key levels, it could overcome the bearish narrative and position itself for a more sustained rally. Until then, caution remains warranted for traders and investors alike.
LINK Liquidity test
Chainlink (LINK) is currently trading at $23 after successfully testing demand at the $22 level. Despite holding this crucial support, the price action lacks definitive direction, leaving traders and investors in a state of uncertainty. For now, the bears appear to be in control, with the recent retracement from yearly highs weighing heavily on sentiment. However, the $22 mark has proven to be a resilient support, suggesting that demand could surge at any time to catch up with the uptrend.
In order for LINK to break out of this indecisive phase, it must break out of the critical resistance at $26. A push above this level would invalidate the current bearish outlook and likely trigger a massive rally, with the potential to revisit and break out of previous highs. Such a move would restore confidence among traders and could attract new buyers to fuel further momentum.
Related reading
On the downside, failing to hold above $22 would expose LINK to more selling pressure, which could test lower support levels and prolong the downtrend. For now, the market remains at an inflection point, with both bulls and bears waiting for the next decisive move. The next few days will be crucial for LINK as it tries to find direction amid wider market uncertainty.
Featured image of Dall-E, TradingView chart