Chainlink (LINK) faces price breakdown, but reversal patterns and on-chain data suggest a potential shift. Is a recovery on the horizon?
Chainlink (LINK) has seen its share of ups and downs lately, with a recent price breakdown raising concerns. However, emerging reversal patterns and intriguing on-chain data suggest a potential shift in momentum. Could a recovery be brewing for LINK?
Chainlink Price Breakdown: What Happened?
In mid-May 2025, Chainlink experienced a notable correction, dropping from $18 to around $11.9, marking a 34.2% loss. This bearish downturn was fueled by broader market corrections. The price struggles below $12 amid technical selling pressure.
Head and Shoulders Pattern: A Bearish Signal?
A deeper dive into Chainlink's technical chart reveals the formation of a head and shoulders pattern, which often signals a trend reversal. The LINK price broke down from the pattern’s neckline support at $12.3. Sellers sustaining this breakdown may extend the correction 15% down to $10, followed by an $8 low.
Potential Reversal Signs: Hope for LINK?
Despite the bearish signals, there are glimmers of hope. LINK recently bounced off the lower Bollinger Band, hinting at a potential shift from the downtrend. The Relative Strength Index (RSI) hovers near 33, indicating that LINK might be in oversold territory, potentially attracting dip-buyers.
On-Chain Data: A Bullish Foundation?
Interestingly, the total number of addresses with LINK balances on the Chainlink network has shown stable growth, increasing from 687k in early January 2025 to 718k currently. This suggests growing engagement with the Chainlink ecosystem, potentially laying the groundwork for long-term price stability.
The $11.00 Support: A Crucial Level
Chainlink has recently found itself at a critical juncture, tapping the lower boundary of a multi-month descending channel after slipping from its range highs. With the current price at $11.82, and a slight dip in market cap to $8.01 billion, market participants are closely watching for signs of a trend reversal. If the buyers fail to hold above $11.50, another leg downward could happen, retesting the $11.00 support zone.
My Take: Patience is Key
While the technical indicators present a mixed bag, the growing number of LINK holders is encouraging. If momentum continues, LINK could target the $13.20–$13.50 resistance zone next. However, I would advise approaching with caution. The market is still volatile, and further dips are possible.
Wrapping Up
So, is Chainlink poised for a reversal? Only time will tell. But with potential reversal patterns emerging and a growing user base, things are looking a little brighter. Keep an eye on that $11.00 support level, and remember, in the world of crypto, anything can happen! Good luck and happy trading!
