Chainlink (LINK), the popular oracle network token, is facing challenges in its price movement as bearish sentiment outweighs bullish activity. The crypto market has shown that bulls and bears frequently take turns driving momentum. However, in the current Chainlink scenario, bears seem to have a solid grip on the asset’s trajectory, making any short-term recovery unlikely.
Bearish Sentiment Dominates Chainlink Activity
According to data from IntoTheBlock, a prominent blockchain analytics firm, the Bears vs. Bulls indicator for Chainlink heavily favors the bears. This indicator differentiates between two groups: addresses offloading at least 1% of LINK’s trading volume (bears) and addresses accumulating at least the same amount (bulls). The more active the bulls, the greater the potential for price increases, but the current imbalance leans sharply towards selling pressure. As of now, Chainlink bears have outpaced bulls, offloading over 500,000 more LINK tokens than bulls have bought. This volume shift suggests that bullish sentiment may not be strong enough to lift LINK out of its current downtrend.
Adding to the bearish outlook, Chainlink’s In/Out of the Money Around Price (IOMAP) metric shows significant resistance in the $12 to $12.80 price range. The IOMAP analysis reveals clusters of addresses that hold tokens at unrealized losses and profits, which serve as potential points of support and resistance. For Chainlink, there is a strong resistance between $12.47 and $12.82, where nearly 18,000 addresses collectively hold over 100 million LINK tokens. If LINK’s price reaches this range, some addresses may choose to sell, pushing the price lower and intensifying resistance.
EMA and Technical Signals Point Toward a Drop Below $10
On Chainlink’s daily chart, technical indicators also suggest that a further decline may be imminent. The Exponential Moving Averages (EMA), specifically the 20-day and 50-day EMAs, show that both averages are converging in a range signaling indecision in the market. However, given the ongoing selling pressure from bears, Chainlink may experience a breakdown below the psychological $10 level if bulls fail to counterbalance the trend. Such a move would solidify bearish control over LINK’s market and make it even harder for the asset to recover.
Market experts argue that if Chainlink fails to hold above $10, it could experience even greater downward pressure in the coming weeks, potentially finding support closer to $8. This prospect seems likely unless bulls can reclaim a stronger market position.
While the near-term outlook for LINK remains uncertain, a reversal is not entirely out of the question. For LINK to see a sustainable recovery, bullish momentum would need to surpass the current resistance points. However, this shift requires the bears to ease up on their selling, creating a window for the bulls to drive a potential rally. If these conditions align, analysts speculate that LINK could see a rebound toward $15.25 — a target that could reestablish bullish sentiment.
Final Thoughts
Chainlink’s price faces significant headwinds, with bearish pressure intensifying as sell-offs continue. As it stands, the odds favor a bearish outcome in the short term. However, if bulls can re-enter with strong volume and overcome the major resistance barriers, LINK may find an opportunity to recover. For now, investors may need to brace for potential declines and monitor market signals closely.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
About The Author
