In the midst of the ongoing volatility in the cryptocurrency market, Chainlink (LINK) is showing signs of a potential price decline. This is due to the formation of a bearish price action pattern on its daily time frame. Alongside LINK’s bearish outlook, its price has started to decline in tandem with other major cryptocurrencies.
LINK Price Momentum
As of the latest data, LINK is trading near the $10.52 level. The cryptocurrency has experienced a price decline of over 2.7% in the past 24 hours. During this period, its trading volume has decreased by 19%, suggesting lower engagement from traders and investors. This reduced participation may be attributed to the bearish price action pattern currently influencing LINK’s market behavior.
LINK Technical Analysis and Upcoming Levels
According to expert technical analysis, LINK has developed a bearish head-and-shoulder pattern on its daily chart. This pattern signifies potential downward momentum. Furthermore, with the recent price drop, LINK has broken its crucial descending trendline support, a level that has been in place since August 2024.
Based on the current price trajectory, if LINK breaches the neckline of this bearish pattern and closes a daily candle below the $10.30 level, there is a significant possibility of a 13% price decline. This could potentially bring the price down to the $9 mark in the days ahead. Currently, LINK is trading below the 200 Exponential Moving Average (EMA), a key technical indicator that suggests a downtrend. Traders and investors often monitor the 200 EMA for building their positions, whether opting for a long or short strategy.
Bearish On-Chain Metrics
Further supporting LINK’s bearish outlook are the on-chain metrics. Data from the on-chain analytics firm Coinglass reveals that LINK’s Long/Short ratio currently stands at 0.82, indicating a pronounced bearish sentiment among traders. In addition, the future open interest for LINK has increased by 5.2% over the past 24 hours, which is considered a bearish signal for LINK holders.
Whenever the long/short ratio falls below 1 and open interest rises, it typically suggests that traders are starting to short the asset. Presently, 54.84% of top traders hold short positions, while 45.16% maintain long positions. This shift indicates that traders are increasingly betting on a decline in LINK’s price.
