LINK, ADA, Nosedive, as Market Liquidation Runs Into Millions

After enjoying an extended uptrend period, major altcoins, including Cardano (ADA) and Chainlink (LINK), are falling apart. Although other major altcoins are not left out, ADA and LINK are two of the most affected out of the top 20 cryptocurrencies.

At press time, LINK was down 8.13% in the last 24 hours while trading at $15.01. The value of ADA, on the other hand, dropped by 6.39%, with its price at $0.56. The nosedive came as a shock to the market, especially as there had been predictions that ADA could rise above $0.75 in the short term.

Market players have also been bullish on LINK, noting that the cryptocurrency would be one of the best performers of this cycle. However, rallies are not always linear and there are periods of correction, and this seemed like one.

It is also noteworthy that the recent crash was caused by Bitcoin (BTC). According to CoinMarketCap, BTC briefly plunged to $41,649 on December 11 before recovering to $42,185 a few hours later.

As a result of the meltdown, liquidation in the market ran into millions of dollars. Based on Coinglass’ data, ADA suffered a $7.36 million wipeout in the last 24 hours. Also, long positions were the major casualties.

LINK May Head to $14.50

It was also a similar case with LINK, whose 24-hour liquidation was $4.37 million, as shown by the liquidation heatmap above.

According to the LINK/USD 4-Hour Chart, the $15.09 support, which was formerly a resistance point, has been breached. This drop is a sign that LINK’s bullish strength has waned and sellers are now in control of the market.

As it stands, there is a likelihood of the cryptocurrency falling below $15. The next major support level is at $14.34. If LINK guards this support, the altcoin may not dive below $14.50. The Relative Strength Index (RSI) also testified to LINK’s weakness, as the reading was 35.16.

LINK/USD 4-Hour Chart (Source: TradingView)

Meanwhile, there is a chance that LINK’s potential drop below $15 could put the RSI in an oversold state. Should this happen, possibly around $14.50, it could open the floor for long entries.

Is ADA’s Drop a Discount Opportunity?

The market structure of ADA was also similar to that of LINK. However, ADA outperformed its opposite number between December 7 and 9. During that period, ADA’s price went from $0.43 to $0.62.

But at press time, that bullish momentum was no more. The Moving Average Convergence Divergence (MACD) had dropped to -0.008. This implies that the shorter EMA diverged below the longer EMA, indicating increasing downward momentum.

Should the momentum stay bearish, ADA may drop below $0.50 for psychological support. Like the MACD, the On Balance Volume (OBV) also fell. The OBV reading at 4.73 billion reflects decreasing volume pressure that may lead to lower prices.

ADA/USD 4-Hour Chart (Source: TradingView)

A lower price for ADA could also mean buying the token at a discount. So, ADA remains at risk of falling below $0.50. However, other altcoins, including Polkadot (DOT) and Ripple (XRP), also felt the heat of the broader market crash. Irrespective, market participants should be on the lookout. If there is any sign of large buying pressure on BTC’s part, these altcoins may recover.