• Chainlink price is recovering after tapping the lower boundary of a rising wedge pattern.
  • The supply and demand zone formed suggests LINK could move sideways.
  • A breakdown of 78.6% Fibonacci retracement at $30.6 could trigger a 13% correction to $26.64.

Chainlink price shows a swift recovery after the recent drop, with more hurdles on its way. Hence, LINK could experience sideways price action for quite some time.

Chainlink price constricts as significant barriers evolve

Chainlink price crashed nearly 35% during the market-wide sell-off but has recovered almost 25% since then. This upward trajectory will face headwinds due to the supply zone that extends from $38.52 to $44.3.

Interestingly, the supply zone’s upper boundary also coincides with the Momentum Reversal Indicator’s (MRI) breakout line, making it a tough level to crack.

Although unlikely in the short term, breaching this confluence might trigger sidelined investors to jump on the LINK bandwagon to boost its price by 60%. Such a move would propel Chainlink price toward a new all-time high at $70.06, coinciding with the 127.2% Fibonacci extension.

The scenario mentioned above will occur during times of excessive buying pressure. If the buyers fail to pile up, Chainlink price will most likely be stuck trading between the supply and the demand zone.

LINK/USDT 3-day chart

LINK/USDT 3-day chart

If Chainlink price slices through $30.6, it will signal a breakout from the rising wedge pattern. In such a scenario, investors can initially expect a 13% drop toward the upper boundary of the demand zone at $26.64.

Invalidation of the bullish thesis will arrive upon the breakdown of $23.6. This move could further invite panicking investors to crash LINK price by 20% toward the 50% Fibonacci retracement level at $18.8.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

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