The recent drop in Ethereum (ETH) has triggered a broad pullback in the cryptocurrency market, impacting Chainlink (LINK), which has seen an 8% decline. However, the current price action of LINK hints at a potential recovery.
Cryptocurrency Market Pullback
The cryptocurrency market is experiencing a notable pullback after Ethereum reached strong resistance at $3,940. Consequently, ETH has retraced to $3,660—a 5% daily drop. This decline has affected numerous altcoins, including Chainlink (LINK), which is down 8%, reducing its monthly gains to 27%.
Fractal Indicates Possible Upswing
An examination of the daily chart reveals LINK is replicating a fractal pattern seen in late 2024. At that time, LINK broke out of a downtrend, reclaimed both its 100-day and 200-day moving averages, and briefly corrected before surging higher, ultimately gaining over 140%.
Future of LINK and Key Support Levels
If this fractal continues to unfold, LINK must hold its 200-day moving average at $16.01. A bounce from this level would validate the pattern and may initiate movement toward its long-term ascending resistance trendline, currently projected at around $40, indicating a potential upside of over 150% from the current support. However, if LINK fails to maintain this critical level, the next immediate support lies close to the 100-day MA at $15.09. A drop below this could signal further short-term weakness.
Although the current market situation remains uncertain, the scenario for LINK is worth monitoring, as a possible uptrend could respond to the recent pullback.
