Date: Sun, Jan 12, 2025, 04:45 PM GMT
The cryptocurrency market has faced a challenging start to the year, continuing its bearish trend from late 2024. Bitcoin (BTC), the market leader, recently experienced a sharp drop from $102K to $91K before recovering to the $95K level. This market-wide correction has put significant pressure on major altcoins, including Solana (SOL) and Chainlink (LINK), which have seen declines of over 10% in the past week.
Meanwhile, both SOL and LINK are showing signs of recovery, coming back on the green track and testing critical support levels, raising the question of whether these levels will hold or if further downside is imminent.
Solana (SOL)
Solana’s price action has been shaped by a symmetrical triangle pattern visible on its 4-hour chart. The recent downturn saw SOL face rejection near the triangle’s upper boundary at $222, pushing the price down to test the critical support level around $184.
However, SOL has held above this support, currently trading at $189. Technical indicators suggest the possibility of a reversal:
- MACD: The bearish momentum is showing signs of weakening, with the MACD line approaching the signal line.
- RSI: The RSI near 34 indicates oversold conditions, suggesting a potential rebound is on the horizon.
If buyers regain control, SOL could challenge the triangle’s upper resistance near $206. A successful breakout above this level could push the price toward higher resistance zones at $222 and $264.
On the downside, if SOL fails to hold its current support, the price could slip further, with the next major support level at $177.
Chainlink (LINK)
Chainlink has been trading within a descending triangle pattern, which is typically a bearish continuation signal. The recent correction saw LINK face rejection near its triangle resistance at $24.77, driving the price down to test its key support around $19.24.
Currently, LINK is trading above this critical support at $20.11, suggesting that buyers are defending this level. Indicators point to the possibility of a reversal:
- MACD: Selling pressure is weakening, hinting at a potential shift toward bullish momentum.
- RSI: The RSI near 38 reflects oversold conditions, signaling a possible recovery.
If LINK can maintain this level, it may attempt to retest the descending triangle’s resistance near $22. A breakout above this resistance could open the door for LINK to target the $24 and $30.8 levels.
On the flip side, failure to hold the $19.24 support could lead to further losses, with the next major support zone lying near $15.80.
Market Outlook
Both Solana and Chainlink are at critical junctures, with their price action heavily influenced by broader market sentiment. While their technical setups indicate the potential for reversals, much will depend on the market’s ability to sustain buyer interest at these key levels.
Investors should monitor price movements closely and keep an eye on BTC’s performance, as its price stability is likely to have a significant impact on altcoin momentum.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.