Chainlink price at risk of a 16% drop towards $16, but there is still hope

• Chainlink price is currently trading at $19.4 after a significant consolidation from its new all-time high of $23.76.
• The digital asset must defend a critical support level to avoid pulling back even harder.

Chainlink had a healthy consolidation period after a new all-time high that has turned into a steeper correction than what the bulls expected. LINK lost the $20 psychological level and it’s on the verge of a massive pullback towards $16.

Chainlink price must defend this level to avoid a huge pullback and resume its uptrend

On the 1-hour chart, the digital asset has been trading inside a descending wedge with the support level located at $19. A clear breakdown below this point would push Chainlink price down to $16 in the longer term.

LINK/USD 1-hour chart

The In/Out of the Money Around Price (IOMAP) chart seems to confirm this theory as it shows the most significant support area to be located between $16.4 and $17. It also indicates that above $20, bulls will find a lot of barriers before a potential new all-time high.

LINK IOMAP chart

However, since bulls haven’t lost the $19 support level just yet, a rebound from this critical point has the potential to drive Chainlink towards the top of the pattern at $21.2 which coincides with the first massive resistance area according to the IOMAP model.