Chainlink (LINK) has seen significant volatility this week. The price fell more than 13% from Monday’s high, putting LINK at a crucial support level around $11.20. Traders and investors are keeping a close eye on this crucial area.
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The importance of this level is further highlighted by on-chain data from Santiment, which shows that demand for LINK is cooling. This adds to the uncertainty surrounding the asset’s price action in the short term.
The next few days will be crucial as Chainlink hovers around this crucial support. The outcome here could determine whether LINK stabilizes and regains its position or declines even further. This level will likely set the stage for LINK’s next big step, making it a critical focus for market participants.
Demand for Chainlink is cooling down?
Uncertainty and fear are currently driving market sentiment for Chainlink (LINK). Its price is testing a crucial support level amid declining demand.
Data about the Santiment chain points to a weakening market. A negative divergence between price and daily active addresses (DAA) confirms LINK’s recent decline in demand. This metric compares an asset’s price movements to changes in the number of daily active addresses, providing insight into whether network activity is supporting price action.
Currently, LINK’s price-DAA divergence is -61.2%. This indicates a significant discrepancy between the price and the number of active users on the network. Such a substantial negative difference indicates a weakening market and signals the possibility of further price declines.
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The lack of network activity to support current price levels raises concerns. Traders and investors are concerned that LINK could struggle to maintain its position above the crucial support at $11.20. If demand does not pick up soon, LINK could face additional downward pressure, potentially leading to a deeper correction in the coming days.
LINK Price action shows indecision
Chainlink is trading at $11.22 after losing its 4-hour 200 moving average (MA). This critical indicator now acts as short-term resistance. This development has left LINK in a precarious position, with the immediate support level being Tuesday’s low of $10.91.
Staying above this level is essential to maintain the possibility of a sustained uptrend. If LINK holds this support, the price could enter a period of sideways consolidation, paving the way for a potential push towards local highs in the coming week.
However, LINK could face further downside pressure if it fails to hold the $10.91 support. Key levels to watch include $9.50 and the local low of $8.12. A breakdown below these levels could signal a deeper correction, potentially leading to a bearish trend.
On the other hand, a position above $10.91 could provide the basis for a recovery. This could allow LINK to retest higher resistance levels and potentially continue its uptrend. Traders and investors are closely watching these price levels to determine LINK’s next move.