- Chainlink dropped 5.25% after forming a bearish pattern near the 200-day EMA and descending trendline.
- A clean break above $16 is needed to shift momentum; until then, downside risks remain elevated.
Chainlink [LINK] showed signs of fatigue after a 22% rally, with sellers stepping in near key resistance zones.
Despite reclaiming higher levels, the price failed to break above the 200-day Exponential Moving Average (EMA), forming a bearish structure that hinted at a possible reversal.
LINK dips 5% as traders pull back
Over the past 24 hours, LINK slipped by 5.25%, trading around $14.40 at press time.
During this period, investors and traders have shown a lack of interest in the asset, resulting in an 11% drop in trading volume.
On-chain data from IntoTheBlock revealed a 13% decline in Daily Active Addresses, indicating waning user activity.
Bets on short positions have also surged during the same period, indicating that both traders and investors might be preparing for downside momentum.
As of this writing, the major liquidation levels were at $14.25 on the lower side (support) and $15.77 on the upper side (resistance), with traders over-leveraged at these levels, according to on-chain analytics firm CoinGlass.
Source: CoinGlass
Data revealed that if sentiment remains unchanged and the price continues to fall toward the $14.25 level, nearly $2.90 million worth of long positions will be liquidated.
Conversely, if sentiment shifts and the price rises to $15.77, approximately $15.37 million worth of short positions will be liquidated.
Clearly, more capital was stacked against LINK than in its favor. Traders appear confident the asset won’t breach the $15.77 ceiling—at least for now.
Chainlink points to a correction
From a technical standpoint, LINK faced back-to-back rejections at a descending trendline and the 200-day EMA.
Source: TradingView
Each rally toward these zones sparked a steep sell-off, forming a textbook series of lower highs.
This third rejection, now unfolding, aligns with historical price action. If LINK fails to flip $15.77 into support, another 10% drawdown could drag the altcoin down to $12.70.
