Chainlink on the Brink: Analyst Forecasts Potential 50% Plunge if Key Support Fails
A leading crypto analyst has sounded the alarm on Chainlink (LINK), highlighting its approach to a critical technical juncture. The popular oracle cryptocurrency faces a mounting downside risk on longer timeframes, with a significant price collapse on the cards if a crucial support zone around the $10 mark gives way.
The Looming Head and Shoulders Formation
According to crypto analyst CryptoBullet, observing LINK's weekly chart reveals a textbook "Head and Shoulders" pattern. This classic bearish reversal formation signals potential trouble ahead. The pattern's neckline, a vital support level for Chainlink's price action, is currently situated in the $10 to $11 region. The analyst warns that a definitive weekly close below this neckline would confirm the bearish pattern, setting the stage for a measured price depreciation.
Identifying Key Support Levels and Downside Projections
Should the $10-$11 neckline fail to hold, the analysis suggests a drastic outcome. Chainlink's price could plunge by approximately 50%, targeting the $4-$5 range. This projection marks the lowest potential area for LINK this year, contingent on intense selling pressure and a rapid breakdown of current support. An intermediate level of interest for traders lies around $7.15, which coincides with a significant accumulation zone from 2022-2023 and the Point of Control on the Volume Range Visible Profile. While LINK has seen a slight uptick in the last 24 hours, its 5.4% drop over the past week underscores the fragility of its current position. Holding above the neckline is paramount to avoid the bearish scenario and could even trigger a short-term relief bounce.
