Chainlink's $7.20 support gets its third test—bulls say "three's a charm," sellers say "prove it" 🪙

Chainlink [LINK] is trading below its 200-day moving average after a roughly 4% decline in the past 24 hours, with price action testing the $7.20 support zone for the third time. The altcoin broke below an ascending trend channel in late May, a move that coincided with broad crypto market weakness that has persisted since late last year. Sellers pushed LINK to a February low of $7.265 before a small rejection drove a rebound past $8. The price has since retraced to the $7.20 area, where a third touch has left momentum indicators declining and flipping negative, while four-hour candles consolidate around $7.280 with fading MACD bars.

Aggregate liquidations have eased sharply following the move. On June 25, more than 1 million LINK in leveraged long orders were liquidated on Binance's perps market; since the potential bottom formed at $7.20, only 120K LINK have been wiped out. LINK also bounced off the 0.618 Fibonacci retracement level, and a downtrend continuation would require a break below the $7.20 zone.

On-chain and product flows are beginning to align with the technical setup. Chainlink Spot ETFs turned positive again after recording their first daily outflow of $490K on June 22, followed by $138K in inflows the next day. LINK ETFs have ranked among the best-performing altcoin ETFs, and Avalanche [AVAX] Spot ETFs remain the only comparable products yet to record outflows since debut.

Demand from the Chainlink Reserve has also reached a new peak. In June, the reserve accumulated 593,088 LINK, valued at over $4.60 million, bringing total holdings to 4,504,167 LINK. The combined signals of repeated support tests, reduced liquidations, renewed ETF inflows, and growing reserves have begun to point toward a potential bullish reversal, contingent on LINK holding above $7.20.