Chainlink faces bearish pressure: Is a drop to $8 inevitable?
Chainlink likely to drop to $8 before potential recovery and upward move.
- Chainlink was down by 0.49% in the last 24 hours, as the outlook is bearish. Majority of LINK active holders are in the red.
Chainlink [LINK] has seen modest gains on the higher timeframes, with the price up 1.35% for the month and 0.69% for the week as at press time as per CoinMarketCap.
However, despite these gains, LINK’s current price of $10.64 reflected a slight 0.49% drop, highlighting its struggle in the broader downtrend that began after the end of the last bull run.
This downturn has continued, with periods of temporary gains but a general trend downwards in line with the rest of the crypto market.
The price action of LINK/USDT pair showed bearish sentiment, as the price consolidated within a symmetrical triangle and has already pierced the lower trendline.
If LINK breaks and holds below this trendline, it could be a clear signal of further decline. The next price target for LINK would be the $8 level, where some support and potential recovery might be found.
The MACD indicator further suggested that sellers were gaining strength as the momentum bars darkened, reflecting growing bearish pressure.
Additionally, the Stochastic RSI indicated that LINK eas oversold, a signal that sellers were dominating the market.
While oversold conditions don’t always lead to a bounce, they reinforce the likelihood of a continued drop toward $8, despite hopes for a bullish fourth quarter in the crypto space.
LINK’s In/Out of the Money
Examining the on-chain metrics for Chainlink revealed more reasons for concern. Approximately 86% of active addresses were “Out of the Money,” at press time, meaning most holders were facing losses.
Only 3% of active addresses are in profit, and 10% were breaking even. This negative balance created additional selling pressure, as traders may look to offload their tokens to avoid deeper losses.
With such a high percentage of addresses in the red, the outlook for LINK in the short term pointed towards further downside, making a drop to $8 increasingly likely.
LINK OI-Weighted Funding Rate
There is, however, a glimmer of optimism in the Open Interest-Weighted Funding Rates, which were positive at 0.0083%.
This indicates that long traders are paying short traders, which could signal some hope for a reversal. Still, this factor alone may not be enough to counter the broader bearish momentum in the market.
While the long-term prospects for Chainlink remain positive, a move to $8 appears more likely in the short term before LINK can begin to recover and push higher.
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