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Even during periods of incredible price increases across the entire cryptocurrency world, one cryptocurrency stood out from its competitors. Chainlink [LINK] exhibited a weak performance compared to the market during this time. Taking a closer look at LINK can be useful to understand why its price movement occurred this way.
Why Is Chainlink (LINK) Declining?
Bitcoin‘s (BTC) recent price movements shaped the last week’s uptrend in cryptocurrencies. The leader of cryptocurrencies reached a new ATH, and altcoins soon followed suit. However, the rise in sentiment was almost non-existent for LINK.
Most recently, Chainlink (LINK) price experienced a 2.86% decrease over the last 24 hours according to CoinMarketCap, causing concern among investors.
At the time of writing, LINK was trading at $20.70 with a market value of over $12.17 billion, ranking it as the 14th largest cryptocurrency by volume. According to CryptoQuant data, several factors contributing to the recent price correction have emerged.
An analysis showed an increase in the amount of LINK on exchanges, which could be interpreted as growing selling pressure on the token.
During the same period, there was a decline in the number of active addresses and total transactions. The reality of increasing selling pressure was paralleled by the increase in LINK transfers to exchanges. As the token’s price fell, a decrease in the MVRV ratio was also observed.
The Outlook for Chainlink
If the price decline continues, a significant amount of LINK could face liquidation near the $20.39 level. Periods of increased liquidation generally create more pressure on a token, leading to further price drops.
Therefore, for a quick recovery in Chainlink’s price, it needs to remain above the mentioned level. When examining the charts for upward potential, the first target for LINK’s possible rise could be the $21 level.
A breakout above this could result in LINK’s value increasing in the coming days.
To determine whether the trend for Chainlink is reversing, one can look at certain indicators on the chart. The analysis showed that the MACD was moving towards a positive trend.
LINK’s Relative Strength Index (RSI) started to rise again after its decline and settled just above the neutral zone. All these indicators could be interpreted as signs of a potential price recovery, depending on the overall market condition.
