After a significant 12% price decline, the native token of Chainlink lost a critical support level at $14.85, where 17,000 investors and long-time holders had accumulated 73.5 million LINK tokens.
Recently, data from the on-chain analytics company IntoTheBlock indicated that their holdings have turned negative.
Majority of LINK Investors Experience Losses
Following the breach of the $14.85 level, LINK has opened the door for further price decrease on the charts. Currently, the cryptocurrency is trading close to $13.80, marking a 12% drop in the last 24 hours.
Moreover, the trading volume has also decreased by 15%, indicating reduced engagement from investors and traders compared to the previous day.
As a result of these developments, only 24.96% of LINK holders are currently seeing profits, while the percentage of investors in the negative zone has surged to 74.74%.
Chainlink (LINK) Price Analysis and Crucial Levels
According to technical analysis by CryptoCrypto, LINK could potentially experience further downward momentum after breaking out of a three-day consolidation period between $15.85 and $14.85.
Considering the recent price movements and historical trends, if the asset manages to close a daily candle below the $13.80 threshold, there is a strong likelihood that it might drop by another 10% to reach the $12.20 level in the near future.
Given the sustained decline in its price, LINK might struggle to surpass the 200 Exponential Moving Average (EMA) on the daily chart, implying a potential downtrend for the asset.
It is important to note that the 200 EMA serves as a key technical indicator to assess whether an asset is in an uptrend or downtrend.
Bearish Sentiment Among Intraday Traders
The prevailing bearish sentiment surrounding the altcoin is evident through the increased dominance of intraday traders adopting short positions. Their numbers are notably on the rise, especially as more traders are pessimistic about the cryptocurrency’s chances of quick recovery.
As per data from the on-chain analytics firm Coinglass, $14.82 is the critical threshold where short position traders are heavily leveraged, accumulating nearly $10.16 million in short positions. In contrast, long position traders might be reaching saturation, with over-leveraging occurring around $13, where they have amassed only $4.26 million in long positions.
These leveraged positions mirror the prevailing market sentiment, suggesting that short traders could potentially drive the price down to $13 or even lower by liquidating long positions.