Chainlink (LINK) Faces Strong Resistance After 40% Drop — Breakout Unlikely

Key Takeaways

• Chainlink’s price has fallen from a peak of $25 in January and currently trades near below $15.
• On-chain data shows a sell wall ahead that could hinder LINK from recovery in the short term.
• Indicators reveal that LINK’s price might end up trading near $10 amid bearish momentum.
• Interested in buying or selling CHAINLINK LINK COIN? Read our review of the best exchanges to buy and sell CHAINLINK LINK.

After rising to $25 in January, Chainlink’s (LINK) price has erased all the gains and is now down 40% within the last month. This price action leaves Chainlink’s price trading below $15.

While some may view this decline as a chance to buy at cheaper prices, the prospect of a breakout looks increasingly unlikely. With strong overhead resistance in place, here is what could be next for LINK.

Chainlink Continues to Falter

Chainlink’s correction followed a wider market decline. This decline comes amid speculation that the market could have moved to a bearish cycle after prices failed to sustain long-term uptrends.

While it remains uncertain what phase of the cycle this is, IntoTheBlock data shows that LINK’s price might struggle to recover.

One indicator that supports this position is the In/Out of Money Around Price (IOMAP), which classifies addresses based on their current profitability status.

With this data, one can spot resistance or support levels. Typically, if there is more volume of tokens in unrealized profits, it indicates support.

Conversely, if the volume of unrealized losses is higher, it represents resistance. As of this writing, the major resistance for Chainlink’s price rests between $14.93 and $15.36.

At this level, a combined 153 million LINK tokens are out of the money. Thus, if the altcoin tries to approach these points, some holders might break even, increasing selling pressure and hindering the cryptocurrency recovery.

LINK Price Analysis: Outlook Remains Bearish

On the daily chart, LINK’s price has been trading within a descending channel since Jan. 20, making it challenging for the altcoin to rebound.

As seen below, the token tried to establish support at around $18.26 but failed. It made another attempt at $15.19, but the same thing happened.

Looking for a safe place to buy and sell CHAINLINK LINK? See the leading platforms for buying and selling CHAINLINK LINK.

As of this writing, Chainlink’s price is hovering near a crucial support that could lead to a breakdown or recovery. However, the Relative Strength Index (RSI) position reveals that the former will likely happen.

The RSI measures momentum, and its reading ranges from 0 to 100. When the reading is above 50, momentum is bullish.

But when it is below 50, momentum is bearish. As of this writing, the RSI on the LINK/USD chart indicates a bearish trend.

Should this remain the same, Chainlink’s price might fall to $10.19.  If selling pressure intensifies, the cryptocurrency’s value could decline toward a single-digit value.

However, if LINK retests the support at $15.18, this could give way to a hike toward $18.26. This could also set the stage for a rebound in the direction of $25.