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Chainlink has faced significant selling pressure recently, seeing a 22% drop from its local supply zone to critically test demand around the $20 mark. Despite this decline, market sentiment surrounding LINK remains optimistic as analysts and investors anticipate a strong rebound. Many view this pullback as a strategic opportunity to accumulate, with the potential for massive gains later this year.
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Senior Analyst Carl Runefelt shared a compelling technical analysis on X, highlighting that LINK is currently trading within a falling wedge pattern on the daily time frame. Falling wedges are often viewed as bullish reversal patterns, and a break above bearish resistance may signal the start of a major upward move. According to Ronfelt, once LINK successfully breaks through this formation, the way will be paved for a massive rally, which could push LINK towards new highs.
With Chainlink’s strong fundamentals and growing adoption in decentralized finance (DeFi) and blockchain ecosystems, the current price action could serve as a springboard for significant gains. However, the immediate challenge is to regain lost ground and push above the wedge’s resistance. As the market waits for confirmation of the breakout, LINK’s trajectory in the coming days will be crucial to shaping its long-term trend.
Chainlink is poised for a recovery after the recent decline
Chainlink has cemented its position as one of the most promising altcoins this market cycle, standing out in the fast-growing Real World Assets (RWA) sector. Its innovations and partnerships are driving wider adoption, especially through its pioneering collaboration with XRP. This partnership aims to enhance the functionality and adoption of Ripple USD (RLUSD), a stablecoin designed for decentralized finance (DeFi), making Chainlink a pivotal player in the ecosystem.
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Renowned investor and analyst Carl Runefelt recently shared a technical analysis on X, highlighting that Chainlink is trading within a bearish wedge pattern on the daily time frame. This bullish reversal pattern indicates significant upside potential once LINK breaks above the downward resistance. Runefelt set an initial price target of $30.94 following the expected breakout, signaling the potential start of a larger uptrend for LINK.
In addition to its technical setup, Chainlink’s strong fundamentals, including its leadership in oracle solutions and its expanding influence in decentralized finance, position it as a prime contender for this bull cycle. If LINK follows Runefelt’s bullish thesis, the $30.94 target could represent just the beginning of a much larger rally as the altcoin continues to gain momentum and push the boundaries of decentralized innovation.
Price Analysis: Maintaining critical support at $20
Chainlink (LINK) is trading at $20, a critical level that represents a strong weekly demand zone. Analysts and investors are closely monitoring this price point, as it holds the potential to determine the short-term path of LINK’s price movement.
Staying above this key support level is essential to maintain bullish momentum. If LINK can sustain itself at $20, it sets the stage for a potential rebound towards the $25 mark. A breakout of this resistance could lead to a broader rally, which could push LINK to multi-year highs as market sentiment turns in its favor.
However, the risks are high. A break below the $20 demand zone could lead to a deeper correction, with prices potentially returning to the $16 level. Such a move could shake investor confidence in the short term but could also create new accumulation opportunities as LINK creates new support.
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As the market is going through a volatile phase, the coming days will be crucial for LINK. Whether it settles at $20 or tests lower levels, its ability to regain momentum and maintain it above key resistance levels will determine the strength of the next wave in its upward cycle. Investors remain cautiously optimistic.
Featured image by Dall-E, chart from TradingView
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