Chainlink recently broke $25 after an interesting few days, rising double-digits in a single day to stage a test of $27. The price was initially rejected at this level, which would suggest that the momentum does not have as much support as expected. This puts the altcoin in a precarious position as the next move could determine what trend takes form from here.
Chainlink Price At A Crossroads
In a TradingView post, crypto analyst CryptoPilot highlighted where the Chainlink price currently is and the difficulties it is facing. It continues to trade below the $27.3 resistance, and with the latest rejection, is now moving toward the lower boundary of the ascending channel.
In this case, the altcoin risks a price collapse toward the $15-$17 level before its overextended move. It also aligns with the previous price performances when the price has been rejected in similar patterns, leading to a further downward move.
There is also the possibility that the price will continue to rally, and that is only if there is a sustained move above the $27.3 resistance. Breaking this level with strong volume could trigger a rise toward the top of the channel. This channel top lies at the $45-$52 level, suggesting that the price could double if the bulls take control.
The major levels to watch now involve the resistance at $27.3, then with support lying low at $18-$19 before the channel support at $15-$17. Next is the resistance after breaking $27.3, which lies at $34, all of which lies within the ascending channel structure that began back in mid-2022.
Sellers Could Run Out Too
Another analyst who goes by irritated.eth on the X platform has mentioned that the current level where Chainlink is sitting is historically a sell zone. This is seen in the fact that whenever the price pushes upward a bit, sells mount and this breaks the price back down again. Given this, for Chainlink’s bullish trend to continue, the sellers would have to be exhausted, and the analyst points out a factor that could hint at this.
First up is whether the price keeps rising to this sell zone, but sell volume shrinks. This would manifest in a steady uptrend, meaning that sellers are running out of tokens. Then, there is the lack of sharp dips in this sell zone. Finally, if the price is able to break out of this zone above $40 and retest it as support, it would mean the sell-offs are exhausted.
Featured image from Dall.E, chart from TradingView.com
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