Chainlink Eyes Rebound at This Support Amid Broader Price Weakness

As price weakness persists, Chainlink could retest a key support zone that has repeatedly attracted buying pressure in the past.

Chainlink (LINK) is down 4% this week, continuing to mirror the weakness dominant in the broader cryptocurrency market. Meanwhile, its price is approaching a major support zone on the daily chart.

Notably, this support around the $7.05 level is crucial as it has repeatedly cushioned weak price actions. How LINK reacts could prove decisive, as analysts watch whether the area can once again halt the broader downtrend.

Chainlink Targets the $7.05 Support 

The daily chart shows LINK retreating steadily after failing to hold higher price levels. Chainlink rebounded above $8 earlier in the week, reaching an intra-week high of $8.17 on Monday.

Notably, the level aligned closely with the 50-day simple moving average, an indicator that has repeatedly provided resistance in recent weeks. Again, the opposition at the level proved too strong for the upward momentum, with LINK eventually pulling back.

Over the past three days, the asset has dropped nearly 4% before the slight recovery today. Analysts expect deeper corrections, potentially targeting a 9% drop from here to the demand zone around $7.05.

Interestingly, this support has repeatedly acted as a point where previous rebounds start, making it one of the most important technical levels to watch. It was around this area that Chainlink rebounded during the February 6 market crash. The coin also recovered on June 6 and 25 from the same support.

LINK Could Rebound to Nearby Resistance

As such, a successful defense of the $7.05 support could allow buyers to regain control and push LINK higher. This could take the coin toward the nearby resistance at $9.47, a 22% rise from the current price of $7.73 and a 33% increase from the support.

Meanwhile, sustained bullish momentum and an improving broader market condition could push LINK to $10.80, highs last seen in May. This would represent a 53% increase from the support level and a 39% rise from the current price.

However, all these levels depend on Chainlink holding the $7.05 support. Breaking below could see the coin retest the next demand zone below at $6.60.

In the meantime, LINK appears to be rebounding today without a corresponding market participation, which is a concerning trend.

Spot volume has dropped 5% to $5.11 million in the past 4 hours. Futures volume has also declined 14% to $39.35 million in the same timeframe as derivative momentum weakens. A price rise without increased market activity typically ends up being a relief rally before the next leg down.