Chainlink (LINK) hovers around $10, down over 25% over the past month.
Futures traders show bearish sentiment with negative Funding Rate.
Technical indicators suggest potential for further decline to $8.06 or recovery to $12.32.
Chainlink (LINK) finds itself at a critical juncture as it grapples with persistent market volatility and conflicting investor sentiment. The cryptocurrency has been trading in a narrow range around the $10 mark for several days, reflecting a significant 25.91% decline over the past month.
This price action has left both long-term holders and short-term traders pondering LINK’s next move in an increasingly uncertain market environment.
Recent data from Santiment reveals a notable shift in trader sentiment, with the Funding Rate plummeting to -0.015%. This metric, which serves as a barometer for market expectations, suggests a growing dominance of short positions.
The transition from a predominantly long market stance to a brief period of short-biased trading between August 14 and 15 coincided with a price drop from $10.72 to $9.93, followed by a modest rebound.
Source: Santiment Chainlink shows potential downside pressure
The Liquidation Heatmap offers further insights into potential price movements, highlighting liquidity clusters that could influence LINK’s trajectory. Significant concentrations around $9.88 and $9.97 suggest potential downside targets if selling pressure intensifies.
Conversely, liquidity hotspots at $10.39 and $10.86 present possible upside targets should buyers regain control of the market.
From a technical perspective, Chainlink’s price action paints a cautionary picture. The cryptocurrency has been trading within a descending channel since late July, accompanied by declining On Balance Volume (OBV) and Chaikin Money Flow (CMF) indicators.
These metrics point to increased distribution and waning buying pressure, reinforcing the bearish narrative surrounding LINK.
The current distribution phase suggests that Chainlink is struggling to attract the liquidity necessary to break out of its downtrend. If this pattern persists, LINK could face further downside pressure, potentially testing support levels as low as $8.06.
