During the previous week, Chainlink [LINK] experienced its most substantial monthly decrease, plummeting by 26.80% as a result of intense market sell-offs.
In the recent 24-hour period, LINK extended its downward trajectory, witnessing a 61.2% drop. Several market signals now suggest that this downturn could deepen before any significant price shift occurs.
Crucial Barrier Level for LINK
The ongoing descent in LINK’s price might be a deliberate strategy employed by market participants to push it towards a more favorable level, where substantial buying activity can overcome the significant obstacle in the $23.78 vicinity.
According to the In/Out of Money Around Price (IOMAP) indicator, this resistance area holds approximately 110.43 million LINK sell orders from 96,760 different addresses, forming a bottleneck for any upward price movement.
Nonetheless, based on the IOMAP data, LINK could dip to a support zone ranging from $14.27 to $16.65, where there are about 152 million LINK buy orders from 72,890 addresses, potentially generating enough momentum to counteract the selling pressure.
Once this support zone is reached, there may be sufficient momentum for the price to break through the resistance threshold.
Influence of Whales on Market Dynamics
An analysis by CryptoCrypto revealed that large market whales have exerted downward pressure on LINK’s price in the past week.
The Large Holders Netflow to Exchange Netflow metric, which tracks whale activity compared to that of retail investors, indicated a noticeable increase in whale-driven market actions.
This metric currently stands at 0.27%, signifying a 30.26% surge in whale-led market movements.
Should LINK’s price dip to the $14.27–$16.65 support zone, these whales might align with existing buyers, resulting in a potential uptick in price.
Analysis of LINK’s Price Trends
Utilizing a blend of Fibonacci retracement lines and technical indicators such as the Relative Strength Index (RSI), CryptoCrypto assessed the possible future price actions of LINK.
Fibonacci levels are instrumental in identifying likely support and resistance levels. Currently, LINK has slipped below the $18.01 support threshold and is nearing the subsequent support at $14.52, which corresponds with the IOMAP support area.
The RSI, which gauges price momentum and detects overbought or oversold conditions, indicates that LINK is approaching the oversold territory.
At the time of writing, the RSI was at 34.16, indicating substantial selling pressure. If LINK reaches $14.52 with an RSI below 30, a reversal could happen as the selling pressure alleviates.
In conclusion, while whale activity is significant, it may not be the sole factor driving LINK’s next potential surge. If selling pressure eases off and buying interest picks up, a price recovery may ensue.