LINK on the Edge: Will $15.40 Trigger a Bullish Rebound?

Key Insights

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  Chainlink loses year-long trendline support, raising concerns of a deeper correction ahead.
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  Price must break and hold above $15.40 to confirm bullish continuation in the current range.
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  Sideways action is expected below $15.40 as traders await a clear breakout or breakdown setup.

Chainlink (LINK) is trading near $13.96 after a nearly 14% decline over the past week. The token is currently positioned just below a trendline that has provided support since July 2023. This level has historically facilitated short-term rebounds during previous tests.

Analysis from Ali Martinez indicates that LINK has slipped below this ascending trendline. While the break is currently minor, it places the established structure at risk. A more significant drop from this point could lead to a decline towards $12.50, an area that previously served as a base during earlier pullbacks.

$15.40 Still a Key Barrier for Bulls

Technical indicators highlight a distinct resistance zone around $15.40, which has capped several upward movements in recent trading sessions. This level is being closely monitored by traders. A confirmed breakout and sustained hold above $15.40 could potentially ignite upward momentum, driving the price towards the $16.00 area.

Conversely, if LINK encounters resistance at $15.40 and shows signs of weakness, sellers may re-enter the market. As one market observer noted, "A retest of the $15.40 resistance and then showing weakness will also trigger a short." Until the price decisively breaks out of the current range, sideways price action is anticipated.

Short-Term Movement Remains Cautious

Intraday charts depict a pattern of slow and choppy price movement. LINK continues to fluctuate between the $12.50 and $15.40 levels. In the absence of a clear trend on lower timeframes, traders are adopting a cautious approach, awaiting more defined setups before initiating new positions.

A break below $13.50 could potentially lead to renewed selling pressure. Conversely, a move above $15.40 might prompt traders to consider bullish strategies. Until one direction gains significant traction, LINK is expected to remain in a consolidation phase.

As noted by CRYPTOWZRD,

“We now need to wait for the market to form the next mature chart structure.”

Trendline Retest Holds Importance

The trendline originating from July 2023 has been a significant support level for Chainlink bulls, successfully withstanding multiple market pullbacks over the past year. The recent breach of this line raises questions regarding the resilience of the existing trend.

Should LINK manage to reclaim and establish a closing price back above this trendline in the upcoming trading sessions, the current breakdown might prove to be a temporary event. However, failure to do so could increase the likelihood of further declines towards lower support zones.