Chainlink (LINK) has recently demonstrated resilience following a 35% pullback from yearly highs, rallying over 30% to test liquidity around the $23 mark. Despite this recovery, bearish sentiment continues to weigh heavily on altcoins, and Chainlink is no exception. The cryptocurrency has struggled to reclaim its local highs, raising questions about whether the recent rally has enough momentum to sustain further gains.

Leading analyst Ali Martinez provided a detailed technical analysis on X, highlighting a critical pattern that could dictate LINK’s next move. According to Martinez, Chainlink is forming a head and shoulders pattern — a structure often associated with bearish reversals. If this pattern is confirmed, LINK could face a significant decline, potentially dropping to $14 in the coming weeks.

This technical setup places Chainlink at a crucial juncture, where holding above current levels is vital to avoid deeper corrections. Investors and traders are closely monitoring the price action, with $23 as a key resistance level. Whether LINK can overcome the bearish sentiment or succumb to further declines will likely depend on broader market conditions and its ability to invalidate the bearish pattern. For now, Chainlink’s outlook remains uncertain, keeping market participants on edge.

Chainlink Price Action Showing Weakness

Chainlink (LINK) has faced a challenging price environment since its fall from yearly highs, reflecting a broader bearish sentiment in the altcoin market. Despite showing some recovery, LINK’s price action has remained range-bound, with significant resistance forming around the $26 mark. Reclaiming this level is essential to invalidate bearish sentiment and reignite bullish momentum.

Leading analyst Ali Martinez recently shared a technical analysis on X, highlighting the potential formation of a head and shoulders pattern. This bearish setup, if confirmed, could see LINK drop to $14. Such a move would represent a significant drop from current levels and highlight the challenges LINK faces in regaining its previous highs.

However, not all hope is lost. Martinez notes that holding above the $22 mark could provide a strong base for Chainlink to stabilize and potentially reverse the downtrend. A decisive push above $27 would further strengthen the bullish momentum, signaling a potential return to a more optimistic outlook.

For now, the market remains full of indecision. Broader market conditions, including Bitcoin’s performance, will likely influence LINK’s direction. If LINK can successfully navigate these key levels, it could overcome the bearish narrative and position itself for a more sustained rally. Until then, caution remains in order for traders and investors.

LINK Testing Liquidity

Chainlink (LINK) is currently trading at $23 after successfully testing demand at the $22 level. Despite holding this crucial support, the price action has no definitive direction, leaving traders and investors in a state of uncertainty. The bears seem to be holding control for now, with the recent retracement from the yearly highs weighing heavily on sentiment. However, the $22 mark has proven to be a resilient support, suggesting that demand could pick up at any moment to resume the uptrend.

For LINK to break out of this indecisive phase, it must overcome the critical resistance at $26. A push above this level would invalidate the current bearish outlook and likely trigger a massive rally, with the potential to revisit and surpass previous highs. Such a move would restore confidence among traders and could attract new buyers to further fuel the momentum.

On the downside, failure to hold above $22 would expose LINK to increased selling pressure, which could test lower support levels and prolong the downtrend. For now, the market remains at an inflection point, with both bulls and bears waiting for the next decisive move. The next few days will be critical for LINK as it looks to find direction amid broader market uncertainty.

Featured image of Dall-E, chart by TradingView

Source: NewsBTC.com

The post Chainlink Is Forming a Head and Shoulders Pattern – Confirmation Could Take LINK to $14 appeared first on Crypto Breaking News.