- Chainlink price dropped over 6% as short-term momentum weakened
- Analysts still believe LINK could recover if support above $8.90 holds
- Traders are watching the $10.86 and $11.85 zones as possible upside targets
At the time of writing, Chainlink was trading around $9.65 with daily trading volume sitting near $482 million. The token also slipped more than 6% over the past 24 hours, reflecting broader weakness across parts of the altcoin market.
Still, despite the recent decline, many traders are not fully bearish just yet.
That’s mainly because LINK is now approaching what several analysts consider a key demand zone, an area where buyers previously stepped in aggressively during earlier consolidations.
Analysts Believe LINK Could Still Reverse Higher
Crypto analyst Crypto Patel recently pointed toward a possible bullish setup continuing to form beneath the surface, even while short-term momentum cools off.
According to the analysis shared on May 16, Chainlink appears to be retracing back toward what traders call a breaker block region following a previous CISD structure shift. The retracement also lines up closely with an inefficiency fill zone, often shortened to IFVG, where liquidity still remains positioned above current price levels.
In simple terms, traders believe there may still be room for LINK to recover if buyers successfully defend support here.
If the market stabilizes, Patel identified potential upside targets around $10.86 and later near $11.85. However, the broader bullish setup would likely weaken substantially if LINK closes below the important $8.90 level on the daily timeframe.
That support area is now becoming one of the most watched zones on the chart.
Momentum Indicators Show Weakness Building
Even though some bullish structure technically remains intact, momentum indicators have definitely started softening over the last several sessions.
The Relative Strength Index, better known as RSI, has dropped toward 47.87, signaling that buying pressure has weakened considerably compared to earlier rallies. The indicator now sits near neutral territory rather than reflecting strong bullish momentum.
Meanwhile, the MACD indicator is also beginning to flash signs of deceleration.
The MACD line currently remains positive, but the histogram has already slipped into negative territory. That shift often signals that upward momentum is fading and sellers are slowly beginning to regain control over short-term price action.
Because of this, some traders now believe LINK could revisit lower support areas between roughly $9.35 and $9.13 before attempting another recovery bounce.
LINK Price Sits at a Key Decision Point
For now, Chainlink finds itself stuck in a fairly important technical position. Short-term indicators continue leaning weak, but the larger bullish structure has not fully broken apart yet.
That distinction matters.
Crypto markets often experience temporary cooldown phases after strong rallies, especially when traders begin locking in profits near resistance zones. Whether this current retracement turns into a healthy reset or a larger bearish reversal may depend entirely on how LINK reacts around the current support area.
If buyers step back in aggressively and defend the range above $8.90, confidence could return fairly quickly. On the other hand, a breakdown below that level would likely shift sentiment much more bearish in the near term.
For now though, traders remain focused on whether Chainlink can stabilize before another larger move develops.
