Chainlink Down 60% From December Highs, Retesting November Lows: Potential Higher Timeframe Structure Shift Developing

It's been a wild roller coaster for the crypto markets over the past few weeks—especially in the altcoin space.

Chainlink has made a name for itself as the dominant oracle network, connecting smart contracts with real-world data. Yet, despite its strong utility, prices have fallen over 60% from the December highs of $31 per LINK, now trading at $12.76.

Screenshot via TradingView User NoticeTrades

Could LINK be setting up for a higher timeframe move to the upside after falling over 60%? Let's talk about it.

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Historical Outperformance (LINK v BTC)

LINK is a highly volatile asset. It can outperform at times as a high-beta asset, primarily moving with the broader market despite having strong fundamentals. However, because of that correlation, when the overall market takes a hit, LINK—like many other altcoins—tends to decline aggressively.

Source: Godel Terminal – LINK v BTC  (Screenshot: Nick Thomas)

When looking at past years’ performance, LINK has had periods of outperformance in November and December, peaking during those months. However, like most altcoins, it tends to fall back in line when markets become shaky and often underperforms. This has been evident in recent times, where Bitcoin has held up relatively well, while altcoins—including LINK—have struggled.

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LINK Weekly Chart (Log Scale)

Taking a look at the weekly LINK chart, which is in log scale to put things in perspective, LINK has clearly struggled against Bitcoin. This market was never able to trade back up towards its all-time highs when Bitcoin did in 2024.

What's interesting, though, is the current retest of an old weekly trend that started when the overall markets bottomed in Q3/Q4 of 2023.

Screenshot via TradingView User NoticeTrades

When it comes to risk/reward, this level offers a potentially great entry for a risk-on asset in the crypto space.. As a dominant oracle network, Chainlink plays a crucial role in connecting smart contracts with real-world data, adding substantial value to decentralized finance and other blockchain applications.

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LINK Daily Chart

Zooming into the daily chart, we can see the trend that has been intact since December, with a bearish market making lower highs and testing previous lows.

With this recent strength off the 2023 trend line, it's important to understand that the trend is still technically bearish. However, this could be a good sign that the bearish trend may be coming to an end, potentially setting up for a higher timeframe bounce.

Screenshot via TradingView User NoticeTrades

The recent high is around $14.03 per LINK. A break above that level, followed by a strong reclaim, could signal the market is poised for a retrace and the formation of a higher low, indicating a potential trend flip. With that, you could have a solid risk/reward trade setup that may align with a higher timeframe move to the upside, especially if Bitcoin rallies.

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