Chainlink Faces 25% Drop This Week: More Downside Ahead?

The volatility of Chainlink is extreme this week. The price dropped more than 25%, highlighting how volatile the crypto market is. If you are planning to invest in LINK or have already invested, this price analysis is for you. We will see what the resistance and support levels could be for the coming week. What should investors do in these types of scenarios? Let’s dive into the price analysis and see where LINK’s price is heading.

Chainlink Price Analysis from 23rd to 28th February

On 23rd February at 07:30 UTC, the price made the high of the week at $18.15, and the channel in which the price was travelling broke out to the downside. The channel was formed at the lower end of the range, where the price had been consolidating over the previous two weeks. As the price broke out from the channel at 12:00 UTC on 23rd February, it formed a range, providing some relief, but soon the price broke out again to the downside at 01:30 UTC, forming a spike and channel trend.

As RSI was already travelling in the oversold area, the price further dropped out of the channel at 22:00 UTC on 24th February. A golden crossover appeared at 11:00 UTC on 25th February, providing some relief as it indicated a potential reversal or pullback. At 17:00 UTC on 25th February, the price broke out from the trendline to the upside and formed a range. The range then broke out to the upside at 19:30 UTC, but this spike was unable to form a channel. Instead, it created an expanding triangle, indicating range-bound behaviour.

Chart 1: Analysed by vallijat007, published on TradingView, March 1, 2025

The price tested the resistance level at $15.78 multiple times but failed to break it. Meanwhile, the lower end of the expanding triangle at $14.70 provided a support level, which eventually broke to the downside. As the price broke lower at 01:00 UTC on 28th February, it pushed LINK to the low of the week at $13.45.

The spike failed to form a channel and was immediately reversed, forming a spike in the opposite direction. However, this new spike to the upside also failed to create a channel and instead formed another expanding triangle, further worsening the situation.

Potential Breakout Scenarios and Market Outlook

If this expanding triangle breaks to the downside, further selling pressure could be seen in the price of Chainlink. If it breaks to the upside, the resistance level of $15.78 will be significant. Based on the current scenario, it is more likely that the bears will push the price lower and break the support level.

Conclusion: Capital Preservation Is Key

As the Chainlink price is already in a downtrend, the two-week consolidation gave some hope to investors that the price might recover. However, this week’s high volatility of Chainlink shows that selling pressure has not disappeared. Traders and investors should keep in mind that capital preservation is more important than taking positions. If anyone is already invested, they should carefully reassess their strategy and manage their risk.