Chainlink [LINK] has experienced moderate gains in the recent period, with a 1.35% increase over the month and a 0.69% rise for the week according to CoinMarketCap data available at the moment.
Despite these advancements, the current price of LINK stands at $10.64, reflecting a minor 0.49% decline and indicating its struggles amidst a broader downtrend that commenced after the conclusion of the previous bullish phase.
This downward trend has persisted, punctuated by intermittent upswings but overall showing a downward trajectory in sync with the rest of the cryptocurrency market.
The price movement of the LINK/USDT pair has displayed a bearish tone, as the price has been consolidating within a symmetrical triangle and has breached the lower trendline.
A breach and sustained position below this trendline could serve as a clear indication of potential further depreciation. The next price target for LINK might be around the $8 mark, where some support levels and a chance for recovery could reside.
According to the MACD indicator, sellers seemed to be strengthening their position, evident from the darkening momentum bars, reflecting an uptick in bearish sentiment.
Further, the Stochastic RSI indicated that LINK was oversold, indicating seller dominance in the market. While oversold conditions do not always translate to a rebound, they heighten the probability of a continued descent towards $8, despite anticipations of a bullish fourth quarter in the crypto sphere.
Assessing LINK’s In/Out of the Money Status
An analysis of the on-chain metrics for Chainlink revealed additional concerns. At present, about 86% of active addresses are “Out of the Money,” indicating that most holders are experiencing losses.
Merely 3% of active addresses are showing profits, with 10% hovering around the breakeven point. This negative balance exerts additional selling pressure, as traders might seek to divest their tokens to prevent deeper losses.
With such a sizable portion of addresses in negative territory, LINK’s near-term prospects lean towards further downward movement, amplifying the likelihood of a descent to $8.
LINK OI-Weighted Funding Rate
Despite this gloomy scenario, there is a glint of hope in the form of the Open Interest-Weighted Funding Rates, currently standing at a positive 0.0083%.
This signifies that long traders are paying short traders, hinting at a potential reversal. However, this factor alone might not suffice to counter the prevailing bearish momentum across the market.
While the long-range outlook for Chainlink remains favorable, a visit to $8 seems more probable in the short term before LINK can embark on a recovery path and strive towards higher price levels.