Chainlink Price Set For Quick Rebound After Liquidity Grab

The Chainlink (LINK) price saw one big dip, briefly taking liquidity south of recent lows only to rebound.

This aligns with a classic chart pattern of innovative money-hunting liquidity before driving the market up substantially.

Chainlink has rebounded back to around $24.28 in terms of trade after the liquidity sweep. This suggests a quick improvement is possible.

Liquidity Grab and Reversal

LINK’s drop to $22.65 allowed the market to run some liquidity off-stop losses below prior lows.

This classic shakeout typically precedes a reversal, with weaker hands exiting and institutional players stepping in.

From the price action, it appears that Chainlink has bottomed out close to this liquidity zone and is beginning to ambulate upwards.

Similar liquidity grabs in Chainlink’s historical price movement have caused abrupt rebounds.

Levered positions are often liquidated in the market. Cascading stop losses drive the market to reset for a stronger bullish trend.

In past market cycles, we saw LINK‘s strength after the consolidation and correction phases. Such a move’s structure aligns with preceding patterns.

Analysts say that after the recent liquidity sweep, selling pressure may be exhausted, and long-term investors could begin to accumulate.

Chainlink Price Technical Outlook

From a technical point of view, we saw that LINK first had an uptrend that crashed abruptly and smashed hard, from around $26.50 to $22.00, in a straightforward, bearish setup.

The sudden drop indicates much selling pressure here, perhaps profit-taking or weakness on the broader market.

A recovery bounce followed. However, the $24.29 region is now renewed buying interest at lower levels.

Regarding support and resistance, the recent high of $26.50 is a significant resistance area where bulls have had the best of the fight recently.

However, it will face immediate resistance if the price cannot break out above $25.00 – $25.50. This resistance may only be cleared should buying momentum continue.

However, on the negative side, this sharp rebound around $22.00 – $22.50 generated a powerful support zone.

It attracted massive buying volumes, thereby keeping up the pressure on the sellers to sell.

$23.00 – $23.50 could be intermediate support before a more profound correction off the retraces.

The Money Flow Index (MFI 14) is at 74.91 and is near oversold at 80. This implies that bulls are in charge and will be very bullish.

Yet, if the MFI jumps above 80, this may indicate an imminent short-term pullback as the buying excesses bearish sentiment, which can begin another leg up.

There are two possible scenarios for the market now. If sustained above $24.50, this could break out against the $25.00 – $25.50 resistance and potentially advance beyond $26.50.

Should the price get rejected at around 25.00, it will likely retrace to 23.50 – 23.00 before breaking below 22.50 and dropping to 21.00.

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