After a week-long downturn, Chainlink [LINK] is teetering at a critical resistance zone near $12.5 — a level that once served as solid support. The altcoin’s recent price action suggests a retest of this former support, now potentially flipping into resistance. With the broader crypto market showing signs of indecision, LINK’s struggle at this zone could spell trouble for bullish momentum.
Despite a strong rally earlier in the year that saw LINK reach highs of $16, the token has failed to establish a higher high. The lack of a decisive bounce from the descending trendline near $12.5 points to a weakening bullish structure. Technical indicators and market structure suggest the rally may have run out of steam — at least for now.
Adding to the bearish sentiment, on-chain metrics reveal waning investor confidence. Data from CryptoQuant shows LINK’s net deposits on exchanges have edged above the 7-day average — often interpreted as a precursor to selling pressure. Typically, a rise in net exchange deposits signals traders are moving assets off decentralized platforms and into centralized exchanges in anticipation of selling.
Compounding this is troubling insight from CoinGlass’s liquidation heatmaps. These maps highlight a concentration of long liquidation levels just above the $10 mark. In uncertain markets, such zones are often targeted by market makers, triggering liquidations and further accelerating downward price movements.
Should LINK dip below the $12.5 threshold and breach $10, cascading sell-offs could send the price toward $7.5 — a key level from Q4 2023.
For now, $12.5 remains the critical line in the sand. A decisive rebound could reignite bullish hopes, but failure to hold this level may validate the bearish bias both technically and on-chain. With heightened exchange activity and visible liquidation pressure below, the path of least resistance appears to be downward. Traders may want to brace for more volatility ahead.
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.
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