Chainlink (LINK) is currently facing a critical juncture after experiencing a sharp 22% retrace from recent local highs, generating concern among investors and analysts. The downturn is exacerbated by disturbing on-chain data that indicates a potential weakening in Chainlink’s network activity, further contributing to uncertainty surrounding the asset. This decline in activity, when combined with broader market volatility, has intensified fears of additional losses.
Should the prevailing bearish sentiment continue, LINK is expected to test the next significant demand level around the lower $9 mark. This level is crucial for determining the asset’s short-term future. A break below could trigger deeper declines, whereas a successful defense might lay the groundwork for a recovery.
Investors are keenly observing these developments, as the forthcoming days will be pivotal for Chainlink’s price direction and overall market sentiment.
Chainlink (LINK) has recently encountered substantial selling pressure, driven by more than market speculation. A noticeable decline in network activity also significantly influences the ongoing bearish trend.
According to key data from Santiment, the price-Daily Active Addresses (DAA) divergence is currently at -56.35%. This negative divergence indicates a disconnect between Chainlink’s price and user engagement, signaling possible trouble. The DAA metric is essential for understanding whether network activity supports price movements. Generally, when active addresses, which gauge user participation on a blockchain, increase alongside the price, it suggests strong underlying demand and potential for higher values. Conversely, if network activity rises while the price falls, it often presents a buying opportunity, indicating that the market may soon reverse.
However, the current drop in DAA for Chainlink presents a less optimistic scenario. This decrease implies that user engagement isn’t backing recent price action, typically a bearish indicator. An increase in network activity is crucial for LINK to achieve any meaningful consolidation and potential recovery. Without a corresponding rise in DAA, the cryptocurrency may struggle to escape its current downtrend. Investors are closely watching this metric, as continued decline in network activity could exert further downward pressure on Chainlink’s price, possibly pushing it toward lower support levels.
Chainlink (LINK) is presently trading at $10.24, following a dip below the August 16 low of $9.92. LINK quickly recovered after briefly touching $9.84, indicating demand at this level. Nevertheless, despite this rebound, LINK remains below the 4-hour 200 moving average (MA), a critical technical indicator now at $10.80.
Analysts consider this MA a key level, with a successful move above it potentially indicating a shift in momentum, which could push LINK toward the next resistance around $11.50. Conversely, if LINK fails to maintain its current position and slips further, a deeper correction could drag the price to sub-$9 levels. This would signal sustained bearish pressure, with traders and investors closely monitoring the price. LINK’s ability to reclaim the 200 MA or break below its recent lows will be crucial in determining its next significant move.
 faces critical support at $9 amid a sharp 22% retrace and declining network activity, stirring investor and analyst concerns.){kind=link}