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Chainlink (LINK) has recently shown resilience after a 35% retrace from its yearly highs, surging over 30% to test liquidity around the $23 mark. Despite this recovery, bearish sentiment continues to weigh heavily on altcoins, and Chainlink is no exception. The cryptocurrency has struggled to reclaim its local highs, raising questions about whether the recent rally has enough momentum to sustain further gains. Related Reading: Solana Sees Consistent Capital Inflows Since 2023 – Liquidity Influx Signals Growth Top analyst Ali Martinez provided a detailed technical analysis on X, highlighting a critical pattern that could dictate LINK’s next move. According to Martinez, Chainlink is forming a head-and-shoulders pattern—a structure often associated with bearish reversals. If this pattern is confirmed, LINK could face a significant decline, potentially dropping as low as $14 in the coming weeks. This technical setup puts Chainlink at a crucial juncture, where holding above current levels is vital to avoid deeper corrections. Investors and traders closely monitor the price action, with $23 as a key resistance level. Whether LINK can overcome the bearish sentiment or succumb to further downside will likely depend on broader market conditions and its ability to invalidate the bearish pattern. For now, Chainlink’s outlook remains uncertain, keeping market participants on edge. Chainlink Price Action Showing Weakness Chainlink (LINK) has faced a challenging price environment since its drop from yearly highs, reflecting a broader bearish sentiment in the altcoin market. Despite showing some recovery, LINK’s price action has remained constrained, with significant resistance forming around the $26 mark. Reclaiming this level is essential for invalidating bearish outlooks and reigniting bullish momentum. Top analyst Ali Martinez recently shared a technical analysis on X, highlighting the potential formation of a head-and-shoulders pattern. This bearish setup, if confirmed, could send LINK plunging as low as $14. Such a move would represent a significant downside from current levels and underline the challenges LINK faces in reclaiming its former highs. However, not all hope is lost. Martinez notes that holding above the $22 mark could provide a strong foothold for Chainlink to stabilize and potentially reverse the bearish trend. A decisive push above $27 would further strengthen bullish momentum, signaling a potential return to a more optimistic outlook. Related Reading: ONDO Faces 30% Correction Risk If It Loses $1.46 Support – Top Analyst For now, the market remains riddled with indecision. Broader market conditions, including Bitcoin’s performance, will likely influence LINK’s direction. If LINK can successfully navigate these key levels, it may overcome the bearish narrative and position itself for a more sustained rally. Until then, caution remains warranted for traders and investors alike. LINK Testing Liquidity Chainlink (LINK) is currently trading at $23 after successfully testing demand at the $22 level. Despite holding this crucial support, the price action lacks a definitive direction, leaving traders and investors in a state of uncertainty. Bears appear to maintain control for now, with the recent retrace from yearly highs weighing heavily on sentiment. However, the $22 mark has proven to be a resilient support, suggesting that demand could surge at any moment to reclaim the uptrend. For LINK to break free from this indecisive phase, it must overcome the critical resistance at $26. A push above this level would invalidate the current bearish outlook and likely ignite a massive rally, with potential to revisit and surpass previous highs. Such a move would restore confidence among traders and could attract new buyers to fuel further momentum. Related Reading: Bitcoin Is Forming A Symmetrical Triangle – Can BTC Reclaim $100K? On the downside, failing to hold above $22 would expose LINK to increased selling pressure, which could test lower support levels and prolong the bearish trend. For now, the market remains at a tipping point, with both bulls and bears waiting for the next decisive move. The coming days will be critical for LINK as it seeks to find direction amid broader market uncertainty. Featured image from Dall-E, chart from TradingView