Chainlink loses the $25 mark: A sign of a new "storm"?

Chainlink (LINK) is undergoing a challenging phase as the price continuously faces falling pressure along with the general trend of the crypto market. Losing the important support zone around 25 USD has caused many analysts to worry that this cryptocurrency may still face a deeper correction before regaining its growth momentum.

Chainlink falls below $25 – Short-term warning signal

In the first trading session of the week, LINK faced strong selling pressure, falling over 10% and dropping to its lowest level in recent days. Notably, this adjustment came just after a few sessions of strong acceleration that helped LINK reach an 8-month high of 27.87 USD on Friday, indicating that the recent uptrend lacked sustainable momentum to maintain.

After failing to maintain the new resistance zone at 27 – 28 USD, LINK quickly reversed, sliding back to the zone of 25.5 – 26.5 USD throughout the weekend. By Monday afternoon, this coin lost the psychological support level of 25 USD, dropping to 23.5 USD – a price considered a strong support threshold in the short term.

According to AltCryptoTalk, even though LINK has fallen below 25 USD, the price action has not yet broken the upward trend as the coin is still moving within a bullish channel that has lasted for two weeks. In technical analysis, this indicates that the market still maintains an upward structure, as long as the price does not break through the next important support level.

Experts note that the 23.5 USD zone currently acts as a "vital boundary" for the short-term trend. If the price holds above this level, the crypto market may still consider this as a correction phase in the upward trend, and trend traders may continue to look for buying opportunities when the market retreats. Conversely, breaking through this threshold will weaken the bullish structure and open up the risk of a deeper correction.

This development also reflects the market sentiment, which is showing a clear differentiation:

• The buying side still expects long-term growth thanks to the strong fundamentals of Chainlink, especially the major partnerships.
• The selling side is taking advantage of the failure momentum at the 27 - 28 USD threshold to exert selling pressure, pushing LINK back to test key support zones.

This struggle turns the zone 23.5 – 25 USD into a "strategic zone" for the short-term trend of LINK. If maintained, this could be the starting point for a new recovery phase. However, if it fails, the market could quickly shift to a more pessimistic scenario, heading towards lower support zones like 20 – 21 USD.

Fundamental factors reinforcing long-term prospects

In addition to short-term price fluctuations, the technology platform and partner ecosystem continue to be a crucial pillar that helps Chainlink maintain its appeal in the long term. The project is not only limited to the role of a "decentralized oracle network" but is increasingly expanding into a multi-chain data infrastructure layer, serving various applications in both traditional finance (TradFi) and decentralized finance (DeFi).

One of the recent milestones is the announcement by SBI Group – a leading financial group in Japan with 200 billion USD in assets under management – to officially partner with Chainlink. This move is seen as a clear acknowledgment of the practical applicability of the services provided by Chainlink.

According to the agreement, SBI Group will leverage key technologies of Chainlink, including:

• CCIP (Cross-Chain Interoperability Protocol): The cross-chain interoperability protocol allows the transfer of data and assets between various blockchains, thereby opening up the possibility of connecting DeFi with the traditional financial system.
• SmartData (NAV): A solution for accurate and transparent data transmission, helping digital funds and on-chain assets to disclose net value (NAV) in real-time.
• Proof of Reserve (PoR): A collateral and reserve verification tool, playing a crucial role in building trust for stablecoins, tokenization of real-world assets (RWA) or on-chain bond products.

With this integration, Chainlink will support SBI Group in many key objectives:

• Unlock the liquidity of the secondary market, helping funds and digital financial products to be easily traded.
• Increase operational efficiency by reducing costs and eliminating complex intermediaries.
• Ensure privacy and compliance, two factors that the traditional financial industry places special importance on.

Analysts assess that the choice of a major organization like SBI Group to partner with Chainlink is a strong signal indicating that this project has moved beyond the testing phase and is entering a stage of actual commercial deployment. This not only strengthens Chainlink's position in the blockchain industry but also opens up prospects of becoming a key bridge between on-chain assets and the global financial market.

Deep fall risk: The $20 mark in sight?

Although the underlying factors still reinforce Chainlink's long-term growth outlook, some experts warn that LINK may not be ready for a sustainable breakout and will instead have to undergo a deeper correction.

Analyst Ali Martinez notes that LINK is currently in a retest phase of support after a strong rally. On the weekly chart, he points out the existence of a symmetrical triangle pattern that has lasted for 4 years – a structure that often appears before significant price movements.

According to Martinez, if LINK can decisively break out of this triangle, the potential growth target could reach 280%, corresponding to a price range of 95 – 100 USD in the long term. However, before activating this massive bullish scenario, LINK may have to undergo a shakeout, adjusting to the 20 USD zone – about 15% lower than the current price – to test the strength of support and eliminate weak leveraged positions.

In a cautious agreement, analyst Rekt Capital emphasized that the zone of 23.86 USD is currently serving as a "key milestone" in the price structure of Chainlink. This is an important support – resistance level that could shape the direction of LINK in the coming weeks and months.

• If the month closes above 23.86 USD: the uptrend will be reinforced, confirming LINK's maintenance of a positive market structure. This could trigger renewed confidence from investors, paving the way for a strong recovery and retesting higher resistances.
• Conversely, if this zone is broken: LINK will lose its important "defensive barrier", causing the price to potentially continue to slide down to around 19.41 USD – a zone that has never been tested since the breakout at the beginning of August 2024.

In the short term, the market is likely to continue to fluctuate strongly within this range, as buyers and sellers struggle around the support level. Short-term investors need to observe price reactions at 23.5 – 24 USD. Holding this zone will reinforce hopes for recovery, while failure will open up the scenario of testing the 20 USD mark.

In the long term, if the multi-year accumulation triangle pattern is confirmed to break out, Chainlink has the potential to become one of the leading altcoins in the new cycle. At that time, the long-term price target could aim for 95 – 100 USD, corresponding to a growth multiple compared to the current level.

In the current context, LINK is in a state of "fragile balance": on one side is the risk of a deep correction down to 20 USD, while on the other side is the prospect of a significant breakout in the new cycle. For investors, this is a phase that requires patience, monitoring price action at key support zones before increasing positions.

Chainlink - "The next Ethereum"?

In addition to the short-term warnings, there are still optimistic views suggesting that Chainlink (LINK) may be following the path that previously helped Ethereum (ETH) explode in the past.

Analyst Alex Clay noted that LINK is reflecting the long-term growth pattern of Ethereum. Both have formed a multi-year accumulation triangle pattern – a long period of "price compression" in the market before unleashing significant momentum.

• With Ethereum, after breaking through this triangle, the price quickly turned resistance into support, paving the way for a rally and moving towards a new historical peak of (ATH).
• According to Clay, LINK could replicate a similar scenario, as long as the coin quickly regains and consolidates the important resistance level it has just lost. At that point, the "accumulation – breakout – confirmation" process will repeat, helping LINK become one of the altcoins leading the new upward trend.

At the time of writing, LINK is trading around 23.5 USD, falling about 8% in the daily timeframe and losing nearly 5% over the week. This indicates that short-term selling pressure remains significant, and the possibility of retesting the support zone of 20 USD is still present. This is considered the "last bastion" to maintain the mid-term bullish structure.

Although short-term volatility still leans towards downside risk, the overall picture of Chainlink remains positive in the long term. The reasons are:

• Technical pattern: Multi-year accumulation triangles are often a strong signal for a new growth cycle.
• Fundamental factors: Continuous major collaborations such as with SBI Group are expanding the practical application of Chainlink, reinforcing the long-term value of the LINK token.

If Alex Clay's "Ethereum 2.0" scenario becomes a reality, Chainlink could become one of the strongest breakout altcoins in the next cycle, with growth potential far exceeding the current price.

Lilly