Chainlink has experienced a significant breakdown, losing its crucial support level at $16, where approximately 53.87 million tokens were previously held. This shift has led to a re-evaluation of price action as the asset trades within a new, lower range.
The loss of the $16 support zone, marked by a dense accumulation of tokens, indicates a change in market dynamics. The cost basis heatmap reveals that this area had been a strong foundation for LINK during prior consolidation phases. Traders now focus on the implications of this breakdown, particularly as the price slips into a lower cost basis range.
The heatmap illustrates a clear delineation of cost concentration zones, with the most significant band situated near $16. This band had previously supported price action for an extended period before the recent decline pushed the price below this critical threshold for the first time since mid-year.
New Support Levels Forming
With the breakdown of the $16 zone, attention has shifted to a new lower cost basis range established between $12.47 and $12.57, which is supported by 9.58 million tokens. This area is now viewed as the next potential support level as the price approaches it during recent trading activity.
Despite having a lower supply density compared to the previous $16 zone, this new band is still significant enough to attract traders” interest. The heatmap indicates that this range emerged during late summer accumulation, suggesting that a previous pattern of accumulation could be repeating as the price revisits this area.
Market Sentiment and Analyst Insights
Market analysts have noted the implications of Chainlink”s drop below $16, highlighting that this breach has eliminated a critical zone of accumulated cost basis. One analyst emphasized that defending the $14 mark could play a vital role in preventing a further decline toward $12, though any retest carries its own risks.
Another observation points to the historical tendency of LINK to shake out weaker hands before embarking on new trend continuation phases. This behavior has been evident in earlier market cycles, leading to speculation about whether the $12 range will serve as a resurgence point for accumulation.
The signals captured by the heatmap present a pivotal moment for traders monitoring Chainlink closely. The primary question remains: will the $12 range act as a new accumulation zone, or will further declines unfold?
