Amid today’s market correction, Chainlink (LINK) has lost its recent gains, falling back to a crucial support level. An analyst suggests a monthly close above its current range could position the cryptocurrency for a 35% surge.

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Chainlink Retest Crucial Price Zone

Chainlink has retraced 9.1% in the past 24 hours to retest the key $14 support zone again. The cryptocurrency surged 15.7% from last Friday’s lows to hit an 18-day high of $16 on Wednesday, momentarily recovering 35% from this month’s low.

However, the recent market correction halted the momentum of most cryptocurrencies, with Bitcoin (BTC) falling back to the $83,700 mark and Ethereum (ETH) dipping to the $1,860 support zone.

Today, LINK dropped from $15 to $14.07, losing all its Wednesday gains. Previously, analyst Ali Martinez noted that the cryptocurrency has been in an ascending parallel channel since July 2023.

Chainlink has hovered between the pattern’s upper and lower boundary for the last year and a half, surging to the channel’s upper trendline every time it retested the lower zone before dropping back.

Amid its recent price performance, the cryptocurrency is retesting the channel’s lower boundary, suggesting a bounce to the upper range could come if it holds its current price levels.

Meanwhile, Rekt Capital highlighted that the token is testing its multi-month symmetrical triangle pattern, which could determine the cryptocurrency’s next move.

As the analyst explained, Chainlink consolidated inside a “Macro Triangular market structure” for most of 2024 before breaking out of the pattern during the November market rally.

During the Q4 2024 breakout, the cryptocurrency hit a two-year high of $30.9 but failed to hold this level in the following weeks. As a result, it has been in a downtrend for the past three months, with LINK’s price falling back into the Macro Triangle.

“The main goal for LINK here is to retest the top of the pattern to secure a successful post-breakout retest,” Rekt Capital detailed, adding, “It’s possible this is a volatile post-breakout retest.”

LINK Needs To Hold This Level

Rekt Capital pointed out that, historically, Chainlink has had downside deviations into this price range: “Back in mid-2021, LINK produced a downside deviation into this price area in the form of multiple Monthly downside wicks.”

Nonetheless, the cryptocurrency is downside deviating “but in the form of actual candle-bodies closes rather than downside wicks” this time.

The analyst also highlighted that, like in 2021, LINK is trading within a historical demand area, at around $13-5 and $15.5, testing this zone as support. Based on this, the cryptocurrency must successfully hold this area to “position itself for upside going forward.”

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Moreover, the retest is key for reclaiming the top of its triangular market structure. Breaking and recovering that level would “exact a successful post-breakout retest” and enable the price to target the $19 resistance in the future.

The analyst concluded that if LINK closes the month above the triangle top, it “would position price for a successful retest, despite the downside deviation.”

As of this writing, Chainlink trades at $14.09, a 6.9% drop in the monthly timeframe.

Featured Image from Unsplash.com, Chart from TradingView.com

Yesterday, Rep. Jordan Pace reintroduced Bill H. 4256, The “Strategic Digital Assets Reserve Act Of South Carolina”, into South Carolina’s House of Representatives.

Highlights from the bill include the fact that it enables the State Treasurer to invest up to 10% of the funds under the state’s management into digital assets, including bitcoin, and that the state’s Strategic Digital Assets Reserve can include up to one million bitcoin.

The bill also states that the reason for establishing such a reserve is because “inflation has eroded the purchasing power of assets held in state funds” and that “bitcoin, a decentralized digital asset, and other digital assets offer unique properties that can act as a hedge against inflation and economic volatility.”

The bill does not stipulate whether or not state officials should hold the private keys to the bitcoin and other digital assets that it accumulates for the reserve, though it enables the State Treasurer to develop policies and protocols to protect the assets held in the reserve, including the use of cold storage or the contracting of a third party to maintain custody of the assets. The State Treasurer can also utilize a third party to assist in the creation, maintenance, and administration of the reserve’s security.

As per the bill, the State Treasurer would be responsible for preparing a biennial report that includes the total amount of digital assets held in the reserve, the U.S. dollar value of those assets, and transactions and expenditures related to the reserve since the previous report. Also, the State Treasurer would be required to publish proof of reserves, which includes the public addresses of the digital assets held in the reserve on an official state website, enabling citizens to independently audit and verify the reserve’s holdings.

Finally, the bill stipulates that the Strategic Digital Asset Reserve undergo audits that include an examination of the quality of the security of custody solutions; an assessment of compliance with local, state and federal laws; and an evaluation of internal controls to mitigate against cyberattacks and mismanagement.

According to the bill, the independent audits should be conducted annually and submitted to the relevant oversight committee. Any recommendations resulting from the independent audits must be addressed within 90 days of the issuance of the report, and a follow-up reporting detailing the corrective actions taken must also be provided to the oversight committee.