The cryptocurrency market is currently under a wave of bearish sentiment, affecting various digital assets. Among these is Chainlink (LINK), which is experiencing a downturn and is positioned for a significant price drop, although it remains at a robust support level. This pessimistic outlook may be attributed to LINK’s recent price movements and traders’ activities over the past day.
Chainlink (LINK) Technical Analysis: Key Levels to Watch
In-depth technical analysis reveals that Chainlink (LINK) is exhibiting bearish tendencies and is on the brink of breaking through the inclined trendline of its ascending triangle price pattern on the daily chart. Since August 2024, this trendline has provided support for LINK, triggering buying pressure and upward movements each time.
Despite this historical support, the prevailing negative sentiment and bearish outlook among traders pose a risk of LINK breaching this critical support level. If LINK closes a daily candle below the pivotal support level of $10.65, historical price trends suggest a potential 20% decline, bringing the price down to around $9 in the near future.
Currently, LINK is trading beneath the 200 Exponential Moving Average (EMA) on the daily chart, signaling a downtrend. The 200 EMA is a key indicator used by traders to evaluate whether an asset is favorable for short selling or buying.
Analyzing LINK’s Bearish On-Chain Metrics
The bearish outlook for LINK is further corroborated by on-chain metrics. According to Coinglass, an on-chain analytics firm, LINK’s Long/Short ratio is at 0.94, reflecting bearish sentiment among market participants. Furthermore, LINK’s open interest has decreased by 4.5% over the past 24 hours, with a slight increase of 1.5% in the last four hours.
This decline in open interest indicates waning enthusiasm among investors and traders, which could further contribute to the downward pressure on LINK’s price.
Evaluating Current Price Momentum
As of the latest data, LINK is hovering around $11.20, having experienced a 1.1% decrease over the past day. During this period, trading volume has plummeted by 34%, pointing to diminished trader engagement amid a general downturn across the cryptocurrency market.
In conclusion, while Chainlink (LINK) is holding at a significant support level, the bearish sentiment and negative on-chain metrics suggest potential further declines. As traders and investors navigate this challenging landscape, it’s crucial to stay informed and cautious in their decision-making processes.
