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  • Chainlink price nears the end of an ascending broadening wedge pattern that forecasts a 50% drop.
  • Transactional data shows that $17.8 could be an inflection point.
  • If LINK price slices through this support, then a drop to $13 seems likely.

Chainlink price suffered a 26% crash due to the sell-frenzy witnessed on Monday’s trading session. 

A continuation of this selling pressure has caused LINK to drop an additional 17% in the last five hours.

Chainlink price hangs by a thread

Chainlink price has formed a series of higher highs and lower lows since January 17. By joining the pivot highs and lows using trendlines, an ascending broadening wedge forms.

This setup is a reversal pattern when it forms after a bull rally and forecasts a 50% downswing to $13. 

The target is determined by adding the distance between the swing high and pivot low to the breakout point at $27.45.

LINK/USDT 1-day chart

LINK/USDT 1-day chart

Based on IntoTheBlock’s Global In/Out of the Money (GIOM), roughly 28,000 addresses have purchased nearly 42 million LINK at an average price of $27.45.

Therefore, a one-day candlestick close below this level would invalidate the SuperTrend’s buy signal and kickstart a 35% crash to $17.8.

GIOM cohorts show that 41,000 addresses hold 35 million LINK here and will withstand any short-term selling pressure.

However, a sell-off similar to the one seen on Monday’s trading session could breach this support. 

In such a case, the oracle token will drop to the next meaningful support barrier at $13, where 45,000 addresses hold about 55 million LINK.

Chainlink GIOM chart

Chainlink GIOM chart

Regardless of the market’s extreme bearish momentum, investors should note that interested market participants might consider the $17.8 as a place to “buy the dip.”

Hence, the resulting buying activity could not only invalidate the bearish thesis but push the price towards resistance levels at $27.45 or $23.55.

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