Chainlink (LINK) is retesting a crucial support zone amid the market pullback, leading some analysts to suggest that another significant drop may be coming if the current levels don’t hold.
LINK lost the recently reclaimed $25 support level, dropping to the $23.5 area in the afternoon. AltCryptoTalk noted that LINK has been trading within a rising channel for the past two weeks, explaining that the cryptocurrency remains within a crucial support zone despite the drop below $25.
To the market watcher, as long as LINK holds above the support zone’s lower boundary at $23.5, “the overall bias remains bullish, and we will be looking for trend-following long setups on every bearish correction.”
The analyst also highlighted that the Chainlink network is “secure, efficient, and decentralized,” which adds strength to its native token’s rally.
In the Sunday announcement, the companies revealed that SBI Group and Japanese financial services companies will “leverage Chainlink services, including the Cross-Chain Interoperability Protocol (CCIP), SmartData (NAV), and Proof of Reserve to unlock secondary market liquidity and enhance the operational efficiency of tokenized assets” while ensuring privacy and compliance requirements.
LINK has retested the pattern’s upper boundary twice since the Q4 2024 rally, briefly breaking above the crucial resistance last week. As it failed to confirm the breakout, the analyst suggested that Chainlink will experience one more dip before aiming for the $95-$100 area.
Failing to reclaim this area in the monthly timeframe could lead to a deeper pullback toward the $19.41 level, not seen since the early August breakout.
Notably, after breaking out of this pattern last month, ETH confirmed the resistance as support and hit a new all-time high (ETH) last week.
As of this writing, LINK is trading at $23.52, a 8.5% drop in the weekly timeframe.
