Chainlink (LINK) has been struggling with significant volatility this week. Its price has fallen by over 13% since Monday’s high, which has brought LINK to a critical support level around $11.20. Traders and investors are closely watching this key area.
The significance of this level is further underscored by on-chain data from Santiment, which shows that demand for LINK is decreasing. This adds to the uncertainty surrounding the asset’s near-term price action.
The next few days will be crucial as Chainlink hovers around this key support. The outcome here could decide whether LINK stabilizes and regains its footing or continues to fall. This level will likely set the stage for LINK’s next substantial move, making it a critical point of interest for market participants.
Is demand for chain links dwindling?
Uncertainty and fear are currently driving market sentiment for Chainlink (LINK), with its price testing a key support level amidst dwindling demand.
String data from Santiment highlights a weakening market. A negative divergence in price and Daily Dynamic Address (DAA) confirms the recent decline in demand for LINK. This metric compares the asset’s price movements with changes in the number of Daily Dynamic Addresses, providing insight into whether network activity is supporting price action.
Currently, the price discrepancy for DAA LINK is -61.2%. This indicates a significant discrepancy between the price and the number of busy users on the network. Such a significant negative discrepancy suggests a weakening market and indicates the possibility of further price drops.
The lack of network activity supporting the current price level is causing concern. Traders and investors are worried that LINK may have difficulty maintaining its position above the key support of $11.20. If demand does not raise soon, LINK may face additional downward pressure, which could lead to a deeper correction in the coming days.
LINK Price Action shows indecision
Chainlink is trading at $11.22 after a loss of the 4-hour 200 moving average (MA). This critical indicator is now acting as resistance on a low time frame. This development has placed LINK in a precarious position, with the immediate support level being the $10.91 low marked on Tuesday.
Maintaining above this level is crucial to maintaining the possibility of continuing the uptrend. If LINK holds this support, the price could enter a period of sideways consolidation, setting the stage for a potential push towards local highs in the coming week.
However, LINK could face further downside pressure if it fails to hold the support at $10.91. Key levels to monitor include $9.50 and the local low at $8.12. A break below these levels could signal a deeper correction, potentially leading to a downtrend.
On the other hand, holding above $10.91 could provide a basis for a recovery. This could allow LINK to retest higher resistance levels and possibly continue its uptrend. Traders and investors are closely watching these price levels to determine LINK’s next move.
