Chainlink at a key level: Will LINK hold onto $13.40 or crash to $10.40?

• Chainlink is flashing two scenarios — either the price jumps 15% or it crashes 18%.
• Traders are over-leveraged at $13.35 on the lower side and at $13.81 on the upper side.

After four consecutive days of losses, Chainlink [LINK] has now reached a key level that appeared to be a make-or-break situation for the asset.

Amid this downward momentum, investors and traders are showing renewed interest and confidence in the asset, accumulating tokens in anticipation of a potential reversal.

1.78 million LINK moves from BitGet

On the 31st of May, blockchain-based transaction tracker Whale Alert shared a post on X (formerly Twitter) that 1,788,188 LINK tokens worth $25.53 million were transferred from BitGet to an unknown wallet.

This substantial transfer from an exchange to a wallet is typically linked to whales, indicating potential accumulation as the price continues to drop.

Not only this, but exchanges have also been witnessing continuous LINK outflows, as reported by the on-chain analytics firm CoinGlass.

Data from the Spot Inflow/Outflow revealed that over the past 48 hours, exchanges have recorded a significant outflow of over $4.49 million worth of LINK tokens.

Source: Coinglass

This outflow, amid market uncertainty, suggests potential accumulation by investors and long-term holders, which could help control downward pressure.

Current price momentum 

At press time, LINK was found trading near $13.71 after a price decline of 6% over the past 24 hours.

However, during the same period, its trading volume jumped by 7%, indicating heightened participation compared to the previous days.

With this price drop, LINK has reached a key support level of $13.40, a level that previously provided a strong reversal for the asset. However, sentiment and market structure are now different.

If the ongoing potential accumulation continues and downward pressure eases while LINK holds above the $13.40 level, there is a strong possibility that history will repeat itself.

LINK could see a price reversal, soaring by 15% to reach the $15.40 level.

Source: TradingView

On the other hand, if the sentiment remains unchanged and the price continues to bleed, it will break down the local support of $13.40 and close a daily candle below the $13 level. 

In this scenario, LINK could see a price dip of another 18% until it reaches the next support at the $10.40 level.

Major liquidation levels: Short positions are in focus 

At press time, the major liquidation levels were at $13.35 on the lower side (support), where traders have built $1.14 million worth of long positions.

The upper side (resistance) was at $13.81, where traders have built $1.59 million worth of short positions.

Source: CoinGlass

This shows that despite following the price action, traders are considering the current market sentiment, which reflects their interest in short positions.