Home Chainlink needs to recover above $10.5 to avoid a massive collapse
Crypto News

Chainlink needs to recover above $10.5 to avoid a massive collapse

  • Chainlink (LINK) dropped below the daily EMA200 for the first time since April 2020.
  • A failure to recover above $10.5 will increase the selling pressure on the coin.

Chainlink (LINK) hit bottom at $8 on December 23 amid a massive sell-off across the cryptocurrency market. While the coin managed to recover to $10 by the time of writing, it is still over 17% down on a day-to-day basis. The sharp sell-off pushed LINK to 10th place in the global cryptocurrency market rating with the current market capitalization of $4 billion and an average daily trading volume of $2.2 billion.

LINK may be vulnerable to massive losses

From the technical point of view, LINK broke below the vital support area of $12-$11.7 created by the daily EMA100 and a lower line of an upside-looking channel. The development worsened the short-term picture and pushed the price below the daily EMA200 at $10.5. This barrier now serves as the first critical resistance that must be cleared to improve the technical situation and allow for the recovery towards $12.

LINK, daily chart

LINK, daily chart

Meanwhile, the rejection from $10.5 will trigger another bearish wave with the first target at $8 (the recent low). If it gives way, the September 23 low of $7.2 will come into focus.

Meanwhile, according to In/Out of the Money Around Price (IOMAP) data, the price sits on top of a minor support area below the current price. About 9,500 addresses purchased 5 million LINK tokens from $10.7 to $10.4. If this area is cleared, the sell-off will gain traction with the next backstop below $9.5.

LINK, In/Out of the Money Around Price (IOMAP)

LINK, In/Out of the Money Around Price (IOMAP)

On the other hand, the way to the North is cluttered with substantial barriers all the way up to $12, meaning LINK bulls may have a hard time pushing the price above critical resistance levels. 

FX Street

FX Street

FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions.