As the crypto market grapples with uncertainties surrounding the approval of Bitcoin spot ETFs, Chainlink (LINK), the 14th largest cryptocurrency, has entered a correction phase since the end of December. The price of LINK tumbled from a peak of $17.26 to $13.7, marking a 22.3% loss in just two weeks. This downturn also saw the Chainlink price breaking below the support trendline of a channel pattern, signaling a potential extended correction
Will Chainlink Price Rebound from $12.5 Support?
- Healthy Retracement hints the LINK buyers could counterattack at crucial support like $12.7 and $11.2
- A bearish crossover between the 20-and-50-day could prolong the correction trend
- The intraday trading volume in the LINK coin is $475 Million, indicating a 55% gain.
Over the past two months, Chainlink price has shown a limited recovery, achieving slightly higher peaks but with minimal gains above each previous high. This gradual upward trend was encapsulated within a rising channel pattern, characterized by two parallel, ascending trendlines.
Despite the broader uncertainties in the crypto market, the LINK price movements remained consistent with this pattern until January 6th when the price broke below the lower trendline of the channel. This movement indicated a potential shift in market sentiment, with sellers pushing the price into a more pronounced decline.
Yet, amid this downward trend, the LINK price experienced a brief respite as the price rebounded slightly after hitting the 38.2% Fibonacci retracement level, located around $12.8. This minor pullback could potentially retest the breached channel around the $14.1 mark. If the coin price shows sustainability below the channel pattern, the altcoin may fall 18% from the current trading price of $13.7 to hit a 50% retracement level at $11.2.
Whale Accumulation of $17.5 Million LINK Amid Market Correction
A recent observation from Lookonchain has revealed that 12 new wallets, which are speculated to be controlled by a single whale or institution, have withdrawn a staggering 1,287,492 $LINK, valued at approximately $17.5 million, from Binance in just the past three days(January 5th to 7th). This substantial accumulation despite the correction phase indicates the smart money Believes the LINK could prolong its prevailing recovery.
If LINK price retest re-enters the channel, the previous breakdown could be a bear trap, potentially increasing buyer interest. With the possible approval of Bitcoin ETFs, this momentum could propel Chainlink to challenge the $18.25 resistance and potentially reach the $22 level
- Experimental Moving Average: The LINK price trading above the 100-and-200-day EMA reflects the mid-term sentiment remains bullish.
- Moving Average Convergence Divergence: A wide gap better MACD(blue) and signal(orange) in a bearish crossover state reflects the correction trend is active.
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