Chainlink (LINK) is navigating a precarious support zone amid the recent market turbulence, potentially setting the stage for a significant downturn if current levels don’t hold. It’s a tense moment for LINK enthusiasts as the cryptocurrency, having hit an eight-month high of $27.87 just last Friday, has now slipped back to the $23.5 mark. This decline comes after losing the crucial $25 support level, mirroring broader market trends.
Support Zone Under Scrutiny
Market analyst AltCryptoTalk notes that despite the recent dip, LINK remains within a vital support zone. The cryptocurrency has been trading within a rising channel for the last couple of weeks, and as long as it stays above the lower boundary at $23.5, there remains a bullish bias. “We will be looking for trend-following long setups on every bearish correction,” the analyst suggests, underscoring the potential for a rebound.
The robustness of the Chainlink network itself—described as secure, efficient, and decentralized—continues to bolster confidence among investors. Notably, Japan’s financial titan, SBI Group, with assets totaling $200 billion, has partnered with Chainlink to advance innovative applications involving tokenized assets and stablecoins. This partnership aims to harness Chainlink’s Cross-Chain Interoperability Protocol (CCIP) and other services to enhance the liquidity and efficiency of tokenized markets, as detailed in our recent article.
The $20 Question: Is Another Drop Imminent?
Analyst Ali Martinez has a keen eye on a possible further decline towards the $20 level—a 15% drop from current standings. According to Martinez, Chainlink is poised to retest a key support level before a potential breakout. The altcoin’s chart reveals a four-year symmetrical triangle formation that could lead to a 280% surge post-breakout. However, before reaching for the stars, another dip seems likely.
In a previous analysis, Rekt Capital emphasized the importance of maintaining stability around the $23.86 mark, noting that a monthly close above this threshold is pivotal for sustaining LINK’s upward trajectory. Failing to do so might trigger a deeper decline towards $19.41, a level untouched since the breakout earlier this month.
Meanwhile, analyst Alex Clay draws intriguing parallels between Chainlink and Ethereum. Both cryptocurrencies, as per Clay, have been accumulating in long-term triangle formations. LINK, much like ETH, could potentially mirror Ethereum’s path once it reclaims resistance levels, propelling it towards new highs. Ethereum recently confirmed its breakout last month, soaring to a new all-time high last week. For more on LINK’s recent performance, see our coverage of its 12% rally amid a token buyback.
Looking Ahead: Potential and Pitfalls
With Chainlink trading at $23.52, marking an 8.5% weekly decline, the market’s eyes are on its next moves. The cryptocurrency sector remains volatile, and LINK’s fortunes could pivot rapidly. Industry insiders are watching closely, with some cautioning about the potential for further declines, while others eye the prospect of a bullish breakout.
Ultimately, the coming weeks could prove pivotal for Chainlink. Will it tumble further to the $20 mark, setting the stage for a historic breakout, or will it stabilize and consolidate? The answer may lie in the broader market dynamics and the strategic moves by key stakeholders like SBI Group.
The crypto landscape is ever-shifting, and while optimism about Chainlink’s long-term potential remains, the short-term outlook is fraught with uncertainty. Investors and analysts alike are left pondering: Can Chainlink weather this storm and emerge stronger on the other side? Only time will tell, but the stakes have never been higher.
Source
This article is based on: Chainlink Ready For Massive Breakout? A 15% Drop May Come First
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
