Market Overview: Chainlink/Yen (LINKJPY) – Volatile 24-Hour Sell-Off Amid Weak Momentum

• Chainlink/Yen (LINKJPY) fell 5.5% over 24 hours, closing at 2,788 JPY after a sharp sell-off post-liquidity high.
• High volatility seen in early morning ET, with price swinging over 150 JPY in a 4-hour window.
• Key support held at 2,780–2,790 JPY, with bearish momentum intensifying after RSI dropped below 30.
• Volume spiked twice: 674.13 at 23:45 ET and 190.37 at 03:00 ET, confirming downward pressure.
• 15-minute chart shows strong bearish bias; bulls may test 2,800–2,806 JPY to reverse the trend.

Price Action and Volatility

Chainlink/Yen (LINKJPY) opened at 2,820 JPY on 2025-10-27 at 12:00 ET, reaching a 24-hour high of 2,886 JPY before closing at 2,788 JPY on 2025-10-28 at 12:00 ET. The pair traded between 2,757 and 2,886 JPY, with a total volume of 8,070.87 and a turnover of 22,654,087 JPY. Price action revealed a strong bearish bias, with a sharp decline from the liquidity high of 2,886 JPY to 2,757 JPY before stabilizing around 2,780–2,790 JPY.

The volatility increased significantly in the early morning (02:00–05:00 ET), with several bearish engulfing patterns forming. A notable 15-minute doji appeared at 00:00 ET near the intraday low, signaling indecision. However, the lack of follow-through buying confirmed bearish control.

Support and Resistance Levels

Key support levels held firm in the 2,780–2,790 JPY range, with a 15-minute bullish reversal attempted at 05:30 ET. The 2,780 level acted as a magnet for buying, with a 24-hour high of 2,886 JPY forming a bearish impulse zone. Resistance levels above 2,810 JPY showed limited effectiveness, with price failing to close above 2,816 JPY in the final 15 minutes.

Fibonacci retracement levels based on the 15-minute swing (2,886 to 2,757) show 61.8% at 2,785 JPY and 38.2% at 2,834 JPY. The 2,785 JPY level aligns with the 2,780–2,790 JPY consolidation zone, suggesting a possible short-term pivot.

Technical Indicators and Momentum

The 15-minute moving average (20/50) shows a bearish crossover around 02:00–03:00 ET, with the 50-period line crossing below the 20-period line. MACD remains bearish, with the histogram widening in negative territory. RSI dropped to as low as 24 by 05:45 ET, entering oversold territory but failing to trigger a strong reversal.

Bollinger Bands widened during the morning selloff, indicating increased volatility. Price tested the lower band twice between 02:00 and 05:00 ET, suggesting oversold conditions. However, the absence of follow-through buying suggests caution for any short-covering attempts.

Volume and turnover showed a clear bearish confirmation, with large volume spikes at 23:45 ET (674.13) and 03:00 ET (190.37). A divergence appears between price and volume near the 2,790–2,800 JPY range, indicating potential resistance ahead for buyers.

Backtest Hypothesis

Given the bearish bias and confirmed support at 2,780–2,790 JPY, a backtest strategy could be constructed using RSI(14) on a daily timeframe to confirm entries and a fixed stop-loss at 2,800 JPY. A sell signal could be triggered when RSI crosses above 70, while a buy signal may appear when RSI drops below 30 and price consolidates above a 50-period moving average.

For the stop-loss, since the backtest engine requires a percentage, we can calculate it dynamically for each trade. For example, if a short is initiated at 2,800 JPY with a stop at 2,820 JPY, the stop-loss percentage would be approximately +0.71%. This method ensures the strategy adapts to changing market conditions while maintaining risk discipline.