- A decent amount of LINK could be liquidated at around $20.3.
- The market indicators remained bearish on the token.
The entire crypto market was in a bullish phase, causing most of the coins to register in green Chain link [LINK] has disconnected itself from the market.
So AMBCrypto planned to take a closer look at the state of the token to understand what went wrong.
What caused the fall?
The market gained bullish momentum thanks to Bitcoin [BTC] price promotion. The king of cryptos hit a new ATH and soon the altcoins joined the party. However, the same did not apply to LINK.
According to CoinMarketCapChainlink is down more than 2.5% in the past 24 hours.
At the time of writing, LINK was trading at $20.74 with a market cap of over $12.17 billion, making it the 14th largest crypto.
AMBCrypto’s analysis of CryptoQuant facts revealed quite a few factors that have played a role in the recent price correction. In particular, we noted that LINK’s foreign exchange reserve increased.
This meant that selling pressure on the token was high. The number of active addresses and total transactions also decreased over the same period.
The fact that the selling pressure was high was also evident from the peak in LINK stock market inflows. As the price of the token fell, the MVRV ratio fell and The speed followed a similar downward trend.
Source: Santiment
Can Chainlink recover quickly?
If the price decline continues, a significant portion of LINK could be liquidated around $20.39. When liquidation increases, it generally puts more pressure on a token, resulting in a further price drop.
Therefore, Chainlink needs to stay above that level to show a quick recovery. Looking north, the first target should be $21 if LINK gains upside momentum.
A break above that could allow LINK to further increase its value in the coming days.
Source: Hyblock Capital
To check whether investors could expect a trend reversal for Chainlink, AMBCrypto then checked the token’s daily chart. According to our analysis, the MACD showed the possibility of a bearish crossover.
Read Chainlink’s [LINK] Price prediction 2024-24
LINK’s Relative Strength Index (RSI) registered a downtick and headed towards the neutral mark. After rising, the token’s Money Flow Index (MFI) also fell slightly.
These technical indicators suggested that LINK could see a further price decline in the coming days.
Source: TradingView