Why Chainlink will continue favoring the bears this week
- LINK has room to explore more downward price action.
- LINK’s long-term outlook remained favorable, courtesy of Chainlink’s rapid expansion.
Chainlink [LINK] concluded the first week of October with a bearish outcome, after previously achieving a substantial rise from its lowest level in September. The pullback could be the start of a broader pullback that may prevail for the next few weeks, and here’s why.
Is your portfolio green? Check out the LINK Profit Calculator
If we zoom out on LINK’s price chart, we observe that its price pattern has been moving within a support and resistance range. The descending resistance has been active since November last year, with retests taking place in April, July, and October (a few days ago).
LINK retraced after its latest resistance retest by as much as 13%, but the sell pressure has cooled down slightly.
LINK exchanged hands at $7.67 at the time of writing. But can it sustain the sell pressure that we recently observed in the market? Well, there are signs that it could be headed for more downside.
For example, LINK has established an ascending support pattern for its lower range, which means it has some room for the bears before the next support retest.
Let’s take a look at some of the metrics that offer some insights into the current demand situation. LINK’s on-chain volume dipped to its lowest weekly level in the last 24 hours at the time of writing.
We also observed a consistent dip in investor sentiment during the same period, indicating a loss of confidence among traders.
Whales are keeping LINK subdued
Perhaps whale activity is better suited to revealing the next potential impact. According to the supply distribution metrics, some whales have been buying LINK in the last four weeks, and recently reached a monthly high. This included addresses holding between 1,000 – 10 million LINK.
However, the most important whale category is addresses holding between 10 million – 100 million coins (indicated in green). This is because they currently control the majority of LINK’s supply in circulation at 51.95% as per the latest analysis.
This whale category has been contributing to most of LINK’s sell pressure in the first week of October.
How much are 1,10,100 LINKs worth today?
The above observations indicated that there is still a substantial amount of sell pressure coming from some whales. As a result, keeping prices subdued and could be the reason for more capitulation.
But what about the long-term? Well, Chainlink is still growing and expanding its sphere of influence, especially through price feeds and oracle data. This could fuel a favorable outcome for LINK holders in the long term.
The rapidly expanding Web3 ecosystem is underpinned by #Chainlink Price Feeds.
— Chainlink (@chainlink) October 7, 2023