Chainlink (LINK) is currently trading within the $8.8 to $9 range, showing signs of a rebound from its recent lows. Although this upward movement has provided a momentary sense of relief for traders, a closer examination reveals that the overarching situation remains unchanged. The price continues to linger below the critical resistance level of $10, which carries significant technical and psychological importance. As market volatility decreases and the weekend approaches, traders are bracing for a potential breakout attempt.
The recent rise in LINK’s price follows its defense of the $8 support area—historically identified as a demand zone. However, the overall trend indicates a consistent formation of lower highs dating back to November. A prior breakdown below the $12 level previously signaled bearish momentum, and bulls have yet to reclaim any substantial structural levels since then. Thus, the range between $9.5 and $10 is particularly vital.
The $10 mark is not merely a psychological barrier; it corresponds with an earlier breakdown area and coincides with significant supply zones visible on the daily chart. Price rallies in the past have often encountered resistance around similar levels, indicating ongoing selling pressure. Notably, trading volume increased during the recent downturn, demonstrating robust selling interest. While momentum indicators, like the Chaikin Money Flow (CMF), are gradually moving toward neutral territory, this recovery reflects initial signs of renewed capital inflow rather than aggressive buying.
For buyers, achieving a strong daily close above the $10 mark accompanied by substantial volume could create a rapid shift in momentum, leading to potential upside targets at $11.5 and subsequently $12, an area noted for intense selling in the past. A move above $12 would break the current pattern of lower highs, signaling a possible return of bullish control. Until such a move occurs, however, any attempts to rally may remain precarious.
Conversely, if LINK faces rejection in the $9.5 to $10 range, the bearish structure will persist. This scenario could see the price retreat toward the crucial $8 support zone, with a breakdown below this level likely triggering additional selling pressure and potentially driving prices down to $7. Given the current tight price compression, any decisive movement—whether upward or downward—could gain momentum rapidly.
Several external factors could also influence the trajectory of LINK in the near future. These include Bitcoin’s overall market direction, upcoming macroeconomic data from the U.S., funding rates and open interest within the derivatives market, and institutional activity surrounding LINK futures. Additionally, any significant developments related to the Chainlink network or its ecosystem may also play a crucial role in determining future price movements.
In summary, Chainlink is at a critical juncture, with the $10 level posing an immediate challenge. A successful breakout above this resistance could herald a shift in short-term momentum and set the stage for further gains toward $12. Conversely, should resistance prevail, the lingering bearish trend may continue. Market participants remain vigilant, monitoring whether LINK can overcome the $10 hurdle or if this recent uptick will simply fade into yet another lower high.
