Key Insights:
- •Chainlink tests $21.27 support, key to maintaining upward trend or deeper pullback.
- •A break above $22.13 could signal recovery, while a drop below $21.27 suggests more downside.
- •$27.81 break could confirm a bullish wave-(C) of 3, signaling potential price surge.
Chainlink ($LINK) was currently testing an important support level around $21.27. The cryptocurrency has seen some positive movement recently, with a 2% increase over the last 24 hours and a 12% rise over the past week. As the price approaches this key level, the question many traders are asking is whether $21.27 can hold as support during the wave 4 pullback.
Testing the $21.27 Support Zone
Chainlink is testing the $21.27 level, which aligns with the 62% Fibonacci retracement. This is a critical support zone that could help the price stabilize if it holds. In Elliott Wave theory, a wave 4 pullback typically finds support at this level, and holding above it could allow the price to continue moving upward.
If Chainlink stays above $21.27, it would suggest the pullback is part of a normal corrective phase. This could set the stage for a potential rise in price, with traders watching closely for confirmation of a shift to wave 5 in the upward trend. However, a break below $21.27 could signal deeper declines and potentially disrupt the bullish outlook.
Potential Resistance Levels
If Chainlink maintains support at $21.27, the next resistance levels to watch are around the 24% and 38% Fibonacci extensions, at $22.13 and $21.80, respectively. A move above these levels would show that the price is recovering and could set up further gains. On the other hand, a drop below the $21.27 support zone could lead to a deeper pullback, putting pressure on the overall trend.
The next few days could be crucial for Chainlink, as it faces these key support and resistance levels. A bounce from $21.27 would confirm that the pullback is healthy and may lead to an upward move.
Wave-C of (B) and Long-Term Outlook
Chainlink's price has recently reacted to the 100% Fibonacci extension level at $20.15, which corresponds to wave-C of (B) in Elliott Wave terms. A breakout above the current descending trendline would signal the start of wave-(C) of 3, potentially leading to higher price targets. If the price breaks above $27.81, it would mark a strong signal of a bullish trend.
However, if the price fails to hold above the $21.27 support level, it could lead to further downside. A break below this zone would weaken the current bullish case and may signal a shift in market sentiment.
Conclusion: Key Levels to Monitor
The next move in Chainlink depends largely on whether $21.27 holds as support. If the price stays above this level, it could continue its upward momentum. If the support fails, the price could experience further declines, invalidating the current positive outlook. Traders are watching these key levels closely for clues on the next direction in price action.