Chainlink price dives by 30%, but the bulls bought the dip and aim for a recovery

Chainlink price plummeted after a breakdown from the ascending parallel channel on the 12-hour chart.
Bulls managed to buy the dip and push LINK back up.

Lorenzo Stroe Independent Analyst

Chainlink has been trading inside an ascending parallel channel for close to three months before finally seeing a massive 30% breakdown which was fairly close to the price target that we suggested in our last analysis.

Chainlink price in recovery mode, but can the bulls sustain the rebound?

After a breakdown below $12, Chainlink plummeted down to $8.05 before quickly bouncing back up within 24 hours hitting $11.88. Several days later, the digital asset formed a higher low at $10.47 and a higher high at $13.24 confirming an uptrend on the 12-hour chart.

LINK/USD 12-hour chart

Now, bulls need to recover the 50-SMA and the 100-SMA levels and turn them into support points. A breakout above $12.8 can quickly drive Chainlink price towards the high of $14.5 set on December 17.

LINK IOMAP chart

The In/Out of the Money Around Price (IOMAP) chart seems to confirm this theory as it shows the strongest resistance area to be located between $12.36 and $12.73 and very little resistance above.

However, the IOMAP also shows very little support in comparison to the resistance above giving the bears the upper hand. A breakdown below $10.47 can push Chainlink price towards the last low at $8.05.

Author

Lorenzo Stroe

Independent Analyst

Lorenzo is an experienced Technical Analyst and Content Writer who has been working in the cryptocurrency industry since 2012. He also has a passion for trading.