In the midst of the current market downturn, Chainlink (LINK) has forfeited its recent gains, retreating to a vital support level. An analyst posits that a monthly closure above its present range could set the crypto up for a 35% leap.
Chainlink has seen a 9.1% decline in the last 24 hours, revisiting the crucial $14 support zone. The digital asset climbed 15.7% from last Friday’s nadir to reach an 18-day peak of $16 on Wednesday, temporarily recouping 35% from its monthly low.
However, the recent market downturn has checked the advancement of most digital currencies. Bitcoin (BTC) has retreated to the $83,700 mark, while Ethereum (ETH) has slipped to the $1,860 support zone.
Today, LINK slid from $15 to $14.07, erasing all its Wednesday gains. Analyst Ali Martinez previously observed that the digital asset has been tracking an ascending parallel channel since July 2023.
For the past 18 months, Chainlink has oscillated between the pattern’s upper and lower boundary, each time scaling to the channel’s upper trendline after a retest of the lower zone before falling back.
With its current market performance, the digital asset is revisiting the channel’s bottom boundary, implying a potential rebound to the upper range if it maintains its current price levels.
Simultaneously, Rekt Capital noted that the token is probing its multi-month symmetrical triangle pattern, which could dictate the crypto’s next move. As the analyst expounded, Chainlink was mainly consolidating within a “Macro Triangular market structure” throughout most of 2024 before breaking out of the pattern during the November market surge.
During the Q4 2024 breakout, the digital asset reached a two-year peak of $30.9 but was unable to sustain this level in the weeks that followed. Consequently, it has been on a downward trajectory for the past quarter, with LINK’s price reverting back into the Macro Triangle.
Rekt Capital expounded that Chainlink’s main objective is to retest the pattern’s apex to ensure a successful post-breakout retest. The analyst also highlighted that, similar to 2021, LINK is operating within a historical demand area, around $13.5 – $15.5, validating this zone as support.
Based on this, the digital asset must successfully maintain this area to “position itself for upside going forward.” Moreover, the retest is vital for regaining the peak of its triangular market structure. Breaching and reclaiming that level would “exact a successful post-breakout retest” and set the price to aim for the $19 resistance in the future.
The analyst ended by saying that if LINK concludes the month above the triangle top, it “would position price for a successful retest, despite the downside deviation.” At the time of writing, Chainlink is trading at $14.09, marking a 6.9% reduction in the monthly timeframe.
