Traders on Edge as Chainlink Nears $12.24 Support: Bullish Reversal Imminent?

• Chainlink approaches a critical support level at $12.24, drawing attention from traders anticipating a potential bullish reversal.
• Bitcoin’s decline to $57,000 sparks bearish sentiments, threatening to drag the broader market down and potentially push LINK prices below $10.
• Despite recent setbacks, LINK shows resilience with prospects of a breakout above $17.

As the volatile cryptocurrency market experiences turbulence, altcoins are facing significant downward pressure, with Chainlink (LINK) approaching a critical support level at $12.24.

Sentiments in the market have turned bearish, exacerbated by Bitcoin’s plunge to $57,000, threatening to trigger a broader market downturn and potentially dragging LINK prices below $10. The recent downturn was compounded by news of Changpeng Zhao’s four-month jail sentence, which fueled market uncertainty and contributed to Chainlink’s substantial underperformance, culminating in a 31% decline in market capitalization for April.

Chainlink’s price action exhibited a clear bearish reversal, failing to sustain momentum above key levels such as the $15 psychological mark and the 23.60% Fibonacci level. Presently, LINK is on the verge of testing the $12.24 support, with traders cautiously monitoring indicators for signs of a potential bullish turnaround. Notably, both the daily RSI and MACD are hinting at bullish divergence, suggesting a possible uptrend in the making.

Despite the possibility of finding support at $12.24 and the 200-week EMA, prospects for a substantial bullish reversal remain limited. Should selling pressure persist, LINK could test the $8.87 support zone. Nevertheless, Chainlink has demonstrated resilience throughout the market recovery of 2024, boasting a market cap of $9.674 billion and currently ranking 13th in the crypto world, albeit still 67% below its all-time high.

Looking ahead, a potential breakout above $17 could signal renewed bullish sentiment, with expectations of LINK surpassing $20 and potentially reaching new all-time highs of $60.