Key Points
- Chainlink (LINK) has decoupled from the bullish crypto market, experiencing a price drop.
- Increased selling pressure and potential liquidation near $20.39 are contributing factors.
Chainlink (LINK), unlike most cryptocurrencies, has not benefited from the current bullish trend in the crypto market.
Chainlink’s Declining Performance
The cryptocurrency market has been experiencing a bullish phase, with many coins registering gains. However, Chainlink has been an exception to this trend.
Bitcoin’s price action has been a significant factor in driving the market’s bullish momentum. Yet, Chainlink has not followed suit. Data from CoinMarketCap reveals a more than 2.5% drop in Chainlink’s value over the last 24 hours.
At the time of writing, Chainlink was trading at $20.74, with a market capitalization exceeding $12.17 billion, ranking it as the 14th largest cryptocurrency.
Factors Influencing Chainlink’s Price
Analysis of CryptoQuant’s data reveals several factors contributing to Chainlink’s recent price correction. Notably, there has been an increase in Chainlink’s exchange reserve, indicating high selling pressure. Concurrently, the number of active addresses and total transactions have declined.
The high selling pressure is further evidenced by a spike in Chainlink’s Exchange Inflow. The token’s price, MVRV ratio, and Velocity have all followed a declining trend.
If the price continues to drop, a significant amount of Chainlink may be liquidated near the $20.39 mark. Increased liquidation typically results in further price drops. Therefore, for a swift recovery, it is crucial for Chainlink to maintain a price above this level.
Looking forward, if Chainlink gains upward momentum, the initial target should be $21. Breaking above this level could potentially drive the value further up.
Analysis of Chainlink’s daily chart indicates the possibility of a bearish crossover, as suggested by the MACD. Furthermore, Chainlink’s Relative Strength Index (RSI) has registered a downtick, while its Money Flow Index (MFI) has also slightly decreased after a rise. These technical indicators suggest a potential further price drop for Chainlink in the coming days.
