Key Takeaways
- Chainlink (LINK) price is showing potential signs of near-term downside risk.
- Despite growth in Strategic LINK Reserves, the LINK token might experience a price correction.
- Technical indicators suggest a possibility of the price dropping towards the $12.64 level.
Chainlink Price Analysis Shows Potential for Further Decline
Chainlink (LINK) has recently been trading near the $17.7 mark, close to its monthly low. Following a significant drop to $15 on October 11th during a broader market downturn, LINK has entered a consolidation phase.
Technical Indicators Suggest Bearish Sentiment
Current technical indicators on the daily chart point towards continued downward pressure for Chainlink. The LINK token is trading below both its 50-day and 200-day Exponential Moving Averages. Furthermore, a death cross pattern appears to be approaching, which is often interpreted as a signal of bearish sentiment in the market.
A notable development is the formation of a bearish pennant pattern. This technical formation, characterized by a sharp price movement followed by a consolidation triangle, frequently precedes a significant downward breakout.
Identifying Potential Downside Price Targets
The technical outlook strongly suggests a probable bearish breakout. The immediate support level to watch is $15, which represents the low recorded on October 11th. A decisive break below this critical support could trigger further declines, potentially leading the price towards the ultimate support level identified by the Murrey Math Lines tool, estimated to be around $12.64.
💡 To invalidate this bearish forecast for Chainlink’s price, the token would need to establish a firm position above the psychological resistance level of $20. A sustained break above this threshold could indicate renewed strength and pave the way for further upward movement, with a potential ultimate resistance target at $25.
Growth in Strategic LINK Reserves Emerge as a Potential Support Factor
An influential factor for the Chainlink market could be the ongoing expansion of its Strategic LINK Reserves. Chainlink recently announced the acquisition of over 63,481 LINK tokens in the past week, boosting the total reserve to 586,640 LINK.
The current valuation of these reserves stands at approximately $10.3 million. This marks a substantial increase for a program that commenced only a few months ago. The initiative involves utilizing on-chain and off-chain fees to strategically purchase LINK tokens, potentially contributing to demand.
📊 On-chain data also suggests increasing whale accumulation activity, which may provide support for Chainlink’s price. Whales now collectively hold an estimated 2.97 million LINK tokens, an increase from the previous 2.52 million. Concurrently, the amount of LINK tokens held on exchanges has seen a reduction, dropping to 266 million from a recent high of 283 million tokens.
Expert Summary
Current technical analysis indicates that Chainlink (LINK) faces potential downside risk, with significant support levels identified around $15 and $12.64. While the growth in Strategic LINK Reserves and heightened whale accumulation are positive developments, prevailing bearish technical patterns suggest a need for caution in the short term.