Chainlink Could Plunge Before Starting A Macro Uptrend

Chainlink could plunge before it starts a macro uptrend after the asset started showing flashing sings of intense weakness over the past few days. LINK broke below the lower boundary from the long-held trading range when the buying pressure starts dissolving so let’s check on the chainlink crypto news.

This type of a retrace is unusual for chainlink as the cryptocurrency usually sees sharp downside movements when they are followed by the sharper rebounds. This time, however, LINK was a little different as the drop from the highs of $20.00 caused the asset to see a slow drop towards what is now looking like signs of reversing. It was able to find strong support around $10.50 but Chainlink’s short-term outlook still remains week and analysts noted that it could drop much more further.

One trader is looking at a move towards $7.915 because the support at that level could be enough to shoot it back up to its all-time high which is set around $20.000. The same trader noted that a recapture of $13.00 followed by the confirmation of the level is going to be flipped into a support level which could allow it to buck the downtrend and expand the macro momentum. Chainlink is trading down marginally at a price of $11.00 which marked a notable rebound from the daily lows of $10.50 that was set earlier in the day.

The lows came about the sharp drop lower that was seen earlier this morning which happened along with Ethereum’s drop to lows of $355. Similarly to Ethereum, LINK posted a bullish response to this decline which sent the price skyrocketing towards $11.30. Since then, it lost momentum and dropped slightly lower. It still sits below the range lows in the mid -$11.00 region which had been established over the past few weeks. One analyst explained that he is watching for a few scenarios before he flips long on Chainlink.

ChainLINK could plunge to its bedrock support level of $7.90 before rocketing back to the $20.00 region or it will reclaim the resistance as a support around $13.00 and will use it as a space to get more gains. The analyst explained:

 “Here is what I mean with either buying: (1) Reclaim of resistance as support (2) Buying retest of lower support. With bitcoin being very volatile you don’t want to be stuck holding [altcoins], wait for key levels – don’t get chopped.”