No cryptocurrency has outperformed Chainlink over the last two years of the bear market. But like everything that goes up with such powerful momentum, the way back down is almost nearly as strong.
In what feels like a flash, Chainlink has already lost a full 60% from the 2020 high at $20 to the recent local low. Thus far, the correction has been “healthy” according to one crypto analyst, but if support is lost at $8, so-called Link Marines will be turned into “submarines” with their holdings underwater.
Why Chainlink Investors Could Find Themselves Underwater, Claims Analyst
Chainlink shocked all crypto market participants this year with its astronomical rise out of Black Thursday lows.
During the mid-March madness, the token fell in value to nearly zero on some cryptocurrency exchanges, and anyone who caught that random spike down made themselves a small fortune.
In fact, anyone who bought even the normal lows that day sans any flash crash would have turned roughly $2 into $20 for each LINK token held.
After just a few short weeks, the asset set a new all-time high and went into full price discovery mode. The FOMO and parabola took Chainlink to a high of $20 before profit-taking took over.
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Crypto whales had warned the FOMO would eventually fizzle out, and it did. In just over a month, Chainlink has fallen and fallen hard. The once unstoppable cryptocurrency has now had a steep, yet “healthy” correction, according to one crypto analyst.
The fall to support is likely to hold strong here, the analyst claims, or else “Link Marines” – the token’s most vocal supporters – will become “submarines” in reference to their positions being underwater.
LINKUSD Daily Support At $8 Turns Link Marines Into Submarines | Source: TradingView
Correction Remains Healthy Above $8, Investors Should Focus On Long-Term Value
So long as support at $8 holds, a correction after such an intense parabolic rise is likely to remain healthy. But if Bitcoin and other past parabolic crypto assets are anything to go by, an 80% or more decline isn’t off the table, statistics show.
But the Link Marines are a bullish bunch, and few crypto assets have had the momentum behind it that Chainlink has.
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At least a short-term reversal back to higher prices appears to be in the cards, with Chainlink forming a falling wedge reversal pattern on daily timeframes.
Coinciding with the bullish chart continuation pattern, there’s also a falling wedge on the Relative Strength Index as well. The RSI is also at a point where Chainlink is nearly as oversold as it was on Black Thursday, yet with nowhere near the same market conditions.
All of these signals point to at least some relief in Link Marines’ future before there’s any risk of falling underwater like the analyst claims.
