- Chainlink recent rally has stalled at key resistance levels, triggering a 5.25% price drop amid declining volume and market participation.
- With liquidation risks mounting around the $14.25 support and $15.77 resistance, analysts warn of a potential correction toward the $12.70 zone.
Chainlink Struggles at Key Technical Barriers
Chainlink (LINK) is showing signs of weakness after a strong 22% rally met stiff resistance near the 200-day Exponential Moving Average (EMA) and a descending trendline. The recent 5.25% pullback has brought prices down to around $14.40, signaling a shift in sentiment as bullish momentum fades. Trading volume has dropped by 11%, and Daily Active Addresses have declined by 13%, reflecting dwindling interest and reduced participation.
This stalling momentum suggests the rally may have been a short-lived burst, with technical resistance zones proving too formidable for now.
Liquidation Levels Reveal Market Anxiety
According to on-chain analytics from CoinGlass, current price zones are crucial for leveraged traders. The liquidation map highlights $2.9 million in long positions at risk if Chainlink dips below $14.25, while a surge above $15.77 could trigger a wave of short liquidations worth $15.37 million. This imbalance reflects heightened market volatility and bearish pressure dominating sentiment.
Traders should watch these thresholds closely—any movement beyond them could spark rapid price swings due to automated liquidations.
Technical Analysis Points to Potential 10% Drop
Technically, LINK is facing persistent rejection at the descending trendline and the 200-day EMA. These zones have repeatedly triggered selling, forming a series of lower highs consistent with a bearish trend. Unless LINK can close above $15.77 with strong volume, analysts warn of a potential 10% drop toward the $12.70 support zone—an area historically known for buyer interest.
The failure to build above key resistance levels puts LINK at risk of entering a broader correction phase.
Caution Ahead: Strategic Outlook for Traders
With both technical and on-chain signals pointing toward possible downside, traders are urged to exercise caution. A break above $16 could shift momentum, but holding above $14.25 is vital to prevent a deeper fall. In this volatile setup, risk management tools like stop-loss orders and strategic position sizing are essential.
Chainlink’s recent rally has hit a wall, and signs now point to a possible retracement. Declining volume, bearish technical patterns, and looming liquidation risks create a tense environment for traders. Until LINK can overcome its $15.77 resistance, the path of least resistance appears to be downward—potentially toward $12.70.
