Chainlink Faces Crucial Test at $12 Support After 11% Drop

Chainlink, a prominent cryptocurrency, is currently facing a critical juncture as it approaches a key support level at $12. This threshold is pivotal for determining whether the cryptocurrency will experience a recovery or continue its downward trend. The recent price movements have shown an 11% drop in the last 24 hours, which has heightened the importance of monitoring market trends closely.

Analysts have noted that a strong reaction at the $12 support level could potentially trigger a rebound, pushing the price back towards the $16-$18 range. This indicates that the $12 mark is not just a support level but also a potential turning point for Chainlink's market sentiment. The current trading activity around $12.00 is crucial, as maintaining this level could shift the market sentiment from bearish to bullish. Conversely, failing to hold this level may result in a retest of $10 or even lower values.

The 4-hour price action reveals multiple Change of Character (CHoCH) and Break of Structure (BOS) indications, suggesting shifts in momentum and market structure. The bearish momentum has been accentuated by a sweep of equal highs near $16, leading to a confirmed breakdown below $14.03. This breakdown has solidified a bearish outlook for the token, with investors closely monitoring volume and candle patterns near the $12 mark. The next few trading sessions could determine whether Chainlink rebounds or dips further.

The implications of current price levels are highlighted by Chainlink’s “In/Out of the Money Around Price” analysis. It indicates that around 43.78% of addresses are “In the Money,” representing approximately 674.2 million LINK, which provides a robust support base at the $12 mark. Conversely, approximately 55.19% of the addresses are “Out of the Money,” which presents significant resistance if LINK attempts to rise above current levels.

Further examination of the “Active Addresses by Profitability” shows that a significant portion of LINK holders—54.46%—purchased their assets at prices below $12. This suggests a collective vested interest in defending current price levels. The likelihood of a downward slide below $12 could erode this support, pushing the asset into a precarious position near $10, where there is