Chainlink's Bear Trap Breakout Sets Stage for Rally or Fade

Chainlink's price has made a sharp reversal, catching short sellers off guard. The cryptocurrency pulled off a liquidity grab below a key trendline invalidation zone before snapping back above it, leaving traders wondering if this marks a genuine follow-through or just a temporary reprieve.

The 4-hour chart shows that the price dipped through the ascending trendline's invalidation zone and swept the resting liquidity sitting below $8.265. However, it then closed back above that same zone, which is a classic bear trap setup on the chart right now.

According to CoinGlass liquidation data, long liquidations dominate across every window, indicating that the market just shook out overleveraged buyers on the dip before reclaiming the trendline. This suggests that there's no broad seller conviction in place.