Chainlink Bounces Back: A 30% Recovery After Monday’s Drop
After dipping significantly earlier this week, Chainlink (LINK) has shown resilience by rebounding 30%, climbing from a low of $11.74 to trade at $14.61 at the time of writing. However, the question remains—can this rally continue, or is a pullback imminent?
Over the past week, LINK experienced a price hike spurred by ETF news and strong buyer momentum, hitting $13.57 before correcting sharply. Let’s dive into the factors influencing its current trajectory and what traders should watch for in the coming days.
Chainlink’s Key Levels to Watch
On the daily chart, LINK’s internal structure turned bullish when it surpassed its recent lower high of $13.57. However, the overall trend still tilts bearish, with a critical supply zone evident between $15 and $16.6. To sustain further upward momentum, LINK must turn this zone into a support region.
On the downside, long-term support levels rest at $11.74 and $10.94. Traders should note that while the On-Balance Volume (OBV) has shown signs of improvement, it lacks explosive buying pressure, suggesting caution before betting on significant breakout movements.
Momentum Signals and Potential Pullback
Momentum indicators shed light on LINK’s current situation. The Relative Strength Index (RSI) reading of 54 signals a slight positive shift, but intraday charts have also exhibited signs of a bearish divergence. This divergence could signal short-term pullbacks, particularly towards the $14.2 local support.
Chainlink’s liquidation heatmap further revealed it had swept key magnetic zones between $13.6 and $15. While there are some short liquidations above the $15 mark, the liquidity overhead is not densely clustered, making significant upward moves less likely for now. A probable formation of a range may occur between $14.2 and $15.4 in the short term.
What’s Next for Chainlink?
Traders should keep an eye on the $16-$16.6 resistance. A breakthrough and successful conversion of this range into support could mark the beginning of a sustained bullish trend. However, in the absence of strong buying pressure or dense liquidity zones nearby, an immediate breakout seems less likely.
A more conservative forecast suggests LINK might consolidate temporarily, allowing the market to gain more clarity. For now, staying adaptable and evaluating price action in real-time is key to navigating this phase successfully.
Recommended Product for Crypto Trading Enthusiasts
If you’re a cryptocurrency investor, consider using the Ledger Nano X to securely store your digital assets like LINK. Protect your investments with this trusted hardware wallet and reduce the risk of hacks and breaches.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Conduct your own research and consult with financial advisors before making any trading decisions.
