Chainlink (LINK) Faces Potential 16% Pullback Toward $20 Before Next Breakout Attempt

Chainlink (LINK) is currently navigating a pivotal phase in its price trajectory, with analysts highlighting a potential retracement toward $20 before the next upward breakout attempt. According to analyst Ali, the token has failed to hold its mid-channel resistance, increasing the likelihood of a pullback toward key support levels [1]. This development comes after a significant 60% price surge in under a month, lifting the price from around $15 in late July to over $24. However, this rapid ascent appears to have left the asset vulnerable to near-term corrections.

The Fibonacci retracement levels are playing a crucial role in defining both the downside risks and potential upside targets for LINK. Immediate support is located at $20.11, coinciding with the 0.786 retracement level. Further supports are found at $15.05, $12.27, and $10.00, which align with the 0.618, 0.5, and 0.382 levels, respectively [1]. On the upside, resistance is forming at $29.11, with the major channel top between $42 and $46 — overlapping with the 1.272 Fibonacci extension at $46.47 — indicating a longer-term target should the price manage to break out of its current consolidation phase.

Momentum indicators such as the RSI and MACD suggest that while bullish momentum is intact, the market is entering a period of heightened volatility. The RSI is currently at 68.56, nearing overbought territory, while the MACD line remains above the signal line with a positive histogram [1]. These signals reinforce the bullish case, though analysts warn that short-term pullbacks remain a distinct possibility, especially as the price retests key resistance zones.

Recent on-chain activity also supports the possibility of a near-term correction. A negative divergence in the RSI suggests that upward price momentum may be weakening [2]. If sellers manage to push the price below the 20-day moving average, the token could test the $20 zone before any meaningful upward move resumes. A decisive hold above this level would be critical for maintaining the broader bullish trend, which has been in place since 2023 [1].

While the immediate outlook for Chainlink is clouded by these potential pullbacks, the long-term picture remains positive. A consolidation phase between $20 and $27 is anticipated before the next major upward push toward $35–42 and possibly the $46.47 extension. For now, traders and investors are advised to monitor key support and resistance levels for signals of a potential breakout or breakdown.

Source: [1] Analyst Predicts Chainlink Could Drop Toward $20 Before Next Breakout Attempt (https://cryptofrontnews.com/analyst-predicts-chainlink-could-drop-toward-20-before-next-breakout-attempt/)

[2] Price Predictions 8/15: BTC, ETH, XRP, BNB, SOL, DOGE, ADA, LINK, HYPE, XLM (https://cointelegraph.com/news/price-predictions-8-15-btc-eth-xrp-bnb-sol-doge-ada-link-hype-xlm)