Chainlink (LINK) Breaks Below Key Support, Signaling Potential Downtrend

After a dramatic 13% correction on Friday, Chainlink has shattered key support levels, leaving traders and investors on edge.

The question on everyone’s mind is: what comes next for Chainlink? With a bearish cloud hanging over the market and Bitcoin’s price struggling below $70,000, understanding the technical landscape has never been more crucial.

Chainlink Breaks Key Levels on 4-Hour Chart

The price of LINK has turned bearish after a 13% correction on Friday.

LINK has broken key support levels, notably $17.40, which corresponds to the 100 EMA (Blue line) on the 4-hour chart. The volume profile peaks at $16.70.

The price has also entered the green zone, corresponding to the 200 EMA on the 4-hour chart. This area is anchored to the volume profile peak (Yellow line) of $16.70.

The $16.70 and $18.00 price levels remain strong resistance points. Given the current market conditions with Bitcoin trading below $70,000. LINK is likely to struggle to break through these levels.

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The most important support levels to watch at this price level are $15.60 and $14.30.

These levels correspond to the significant flat baselines of the Ichimoku Cloud on the 4-hour timeframe. Providing key areas of potential support amid the current bearish trend.

LINK Price Analysis: Daily Bearish Outlook

On the daily price action, Chainlink has entered the Ichimoku Cloud, indicating a very bearish signal. The RSI has also dropped significantly from 70 to 43 within this time frame.

LINK is currently finding strong support at the 200-day exponential moving average (green area).

Such a move would likely see the price heading straight to the lower boundary of the red Ichimoku Cloud on the daily timeframe, around $14.30. This $14.30 level is a critical support point , and a continuation down to this level would indicate a bearish trend.

If the price breaks this level (EMA 200) and breaches the $15.60 support level, LINK could be very bearish. The mid-term resistance level is located at the daily 50 EMA and 100 EMA, within the $16.30 – $16.50 price range.

If the price rises above these levels (50 100 EMAs), it could present an optimistic technical scenario for LINK, potentially pushing LINK above the Ichimoku Cloud, which would be a positive bullish sign for the mid-term outlook .

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Given the current market conditions, with Bitcoin trading below $70,000, LINK will likely struggle to break through the $16.70 resistance level.

Monitoring these key support levels ($15.6 and $14.3) can help traders make informed decisions and manage risk effectively.

Additionally, the decline in LINK’s price, now trading 30% below its local high from March 2024, suggests the potential for further declines. Therefore, keeping a close eye on the market and adjusting strategies accordingly is crucial.