Chainlink price has seen a massive collapse over the past five days, resulting in a retest of a crucial barrier. This downswing is not localized to the crypto markets and seems to originate on Wall Street after the Fed tightens the interest rates. This development has caused a massive blow to not just tech stocks but also stay-at-home stocks like Netflix, Peloton, Zoom Video Communications and so on. Due to the overall bearish nature of the markets, a breakdown of the immediate support level could be the key to triggering another leg down for LINK.
Chainlink price slid below the trading range’s midpoint at $25.92 on January 13. A failure to recover led to a 27% crash in less than a week to where it currently trades – $19.46. This downswing flipped the $24.61 support into a resistance barrier.
As LINK hovers above the weekly support level at $18.81, buyers need to quickly make a decision before bears take control. A breakdown of the said barrier will trigger a 20% crash to the next weekly support floor at $14.94. This is where investors can enter short and wait for LINK to move lower.
There is a good chance Chainlink price will sweep below the aforementioned level and retest the range low at $13.38, bringing the total downswing to 31%.
LINK/USDT 1-day chart
While things are looking grim for Chainlink price, a bounce off the $18.81 support barrier will provide buyers with a chance at a comeback. If bid orders start to pile up, LINK could rise higher and retest the immediate resistance barrier at $24.61.
Only a daily candlestick close above the 50% retracement barrier at $25.92 will indicate a resurgence of buyers and invalidate the bullish thesis. Hence, market participants can place their stop-loss at or above this barrier.
Assuming Chainlink price manages to flip above $18.81, investors can expect the oracle token to make a run for the 33.62 resistance barrier.