Chainlink (LINK) has been one of the best performing cryptocurrencies throughout both 2019 and 2020, with its intense upwards momentum allowing the crypto to set fresh all-time highs over the past couple of weeks.
This intense upwards momentum has shown some tempered signs of slowing down, but it still remains somewhat unclear as to whether or not the strong resistance it faced within the upper-$4.00 is enough to halt its strong macro-momentum.
Analysts are noting, however, that the lack of support LINK has throughout the $3.00 region could spark a significant near-term retrace if bulls lose their strength, with one analyst noting that a drop below $4.00 could lead it to drop sharply.
Chainlink Firmly Leads the Crypto Market, but Resistance Grows
At the time of writing, Chainlink is trading up just under 4% at its current price of $4.24, which marks a slight climb from weekly lows of $3.89 that were set last Monday.
Currently, LINK is caught within a mid-term bout of sideways trading that was first sparked after it incurred a massive price decline from weekly highs of $4.89 that were set last Wednesday, just prior to the capitulatory selloff seen by the aggregated market.
Yesterday, the crypto broke beneath a pennant that it had been caught within against its BTC trading pair, opening the gates for some further downside.
Bagsy, a prominent crypto analyst on Twitter, spoke about Chainlink in a recent tweet, referencing a chart showing this breakdown.
“LINK update: Price broke down from pennant but hasn’t broken HTF structure; I’d look at area 1 for a bounce play back into the range. If we begin closing candles beneath the range low, no bueno. Area 2 would be for catching deeper wicks,” he explained.
$LINK update:
Price broke down from pennant but hasn't broken HTF structure; I'd look at area 1 for a bounce play back into the range. If we begin closing candles beneath the range low, no bueno. Area 2 would be for catching deeper wicks. pic.twitter.com/Ouhja6iE7k
— Bagsy (@Bagsy) February 22, 2020
A LINK Drop Could Be Brutal for Investors
Josh Rager, another prominent cryptocurrency analyst, explained in a recent tweet that the crypto is currently in price discovery, and that a drop into the $3.00 region could lead it to plummet towards $2.80 before it finds any notable support.
“LINK: Same as Tezos in price discovery can continue to pump but it if falls, LINK has limited support until under $3. I’d certainly start getting exposure by $2.84 and for some reason, if price gets to $2.16, I’d buy more in that area. Under $2 is like Christmas 2019,” he noted.
https://twitter.com/Josh_Rager/status/1231434264098590721
Despite the potential Chainlink has to see major losses, it is still highly possible that the crypto will continue extending its upwards momentum if the aggregated crypto market remains bullish.
Featured image from Shutterstock.