Chainlink (LINK) Pattern Signals Potential Correction: Can LINK Price Dip to $14?

Chainlink (LINK) shows signs of an imminent price movement, according to technical analysis shared by Ali Charts on Twitter.

Technical analysis by Ali Charts on X suggests that Chainlink (LINK) might be poised for a potential price movement.

According to the analysis, if a head-and-shoulders pattern in the LINK hourly price chart is confirmed, the cryptocurrency could experience a significant drop. Ali suggests that the price might dip as low as $14 in such a scenario.

The pattern on the LINK hourly chart is formed by three peaks. The left shoulder formed as the price reached the $23.5-$27 range and then retreated.

The head emerged when the price rallied to a higher peak around $30, followed by a decline. Finally, the right shoulder formed around $25.8 as the price rose again but failed to surpass the head's height.

The neckline, positioned around $20.5, connects the two lows that formed during the pattern and serves as a pivotal support level. A decisive breakdown below the neckline could signal further downward movement.

The target for this potential move is calculated by measuring the distance between the head and the neckline and projecting it downward.

The difference of approximately $9.5 suggests a possible decline from the neckline’s $20.5 level to $10. This aligns with Ali's tweet, which suggests a potential drop to as low as $14 if the pattern is confirmed.

At the time of writing, LINK is trading at around $22.95, which is slightly above the neckline. The cryptocurrency has seen a decline of 2.53% over the past day.

While the bearish pattern has not yet been confirmed, the price is at a critical juncture. If the neckline holds as support, the bearish setup could be invalidated, allowing LINK to rebound.

However, should LINK breach this level with strong volume, the predicted drop to $14, with the potential for a further dip, becomes more likely.

Volume is a key factor in determining whether this pattern will materialize. A breakdown below the neckline must be accompanied by increased trading volume to validate the bearish momentum. Without this volume spike, the pattern may fail, and LINK could see a reversal.