Chainlink’s price has experienced a significant decline, dropping beneath the critical $8.00 mark on Thursday. The cryptocurrency closed the day at $7.94, reflecting a notable decrease of 4.86%. This downturn was accompanied by a 22% increase in trading volume, reaching $265 million, signaling strong selling pressure as the previous support level has now transformed into resistance.
The situation appears dire for Chainlink, as all 15 daily moving averages display sell signals with the price positioned below each of them. The 200-day exponential moving average stands at $10.60, while the simple moving average is at $10.22, both approximately 30% higher than the current price. Furthermore, the 20- and 50-day averages, sitting between $8.13 and $9.07, now act as barriers to any possible upward movement.
Despite these price struggles, Chainlink is witnessing a growing adoption landscape. Leading cryptocurrency exchange OKX, boasting 120 million users across over 160 countries and more than $40 trillion in total trading volume, has announced its integration of Chainlink. This partnership aims to tap into an $80 trillion tokenized real-world asset market on its X Layer, emphasizing Chainlink’s role as a pivotal enabler for developers to create advanced applications.
Although Chainlink’s overall price trajectory looks troubled, the market response to the launch of spot LINK ETFs has been notably positive. Since their inception last year, these ETFs have not recorded any days of net outflows, accumulating $2.82 million in net inflows, including $1.01 million on June 10. Currently, these ETFs hold nearly 2% of the circulating supply. However, there are limitations; while total inflows reached $123.82 million, net assets have declined to $103.14 million due to a roughly $20 million decrease in holder value caused by price erosion. Importantly, the week ending June 17 did not see any new inflows.
Amidst the bearish trend, there are signs indicating a potential accumulation phase for Chainlink. The 14-day Relative Strength Index (RSI) of 32.46 is firmly situated in oversold territory, a common precursor to relief rallies. Some analysts have drawn parallels between the current market conditions and previous major accumulation phases for Chainlink.
A bullish divergence has surfaced, as noted by analysts, where the price continues to form lower lows while the RSI reflects higher lows. This pattern resembles setups preceding previous significant price breakouts, leading some to speculate that if momentum were to return, Chainlink could be positioned for a notable upward movement.
Conversely, not all analysts share this optimistic view. Some employ Elliott Wave analysis, interpreting a recent rebound earlier this week as merely a correction rather than the commencement of a new upward trend. They highlight Fibonacci resistance levels ranging between $8.32 and $9.91 as critical points to watch.
At present, the main focal point in the ongoing debate surrounding Chainlink’s price is the $8.20 threshold. Without a recovery above this level, the overall sentiment remains bearish, and any rallies toward the moving averages are likely to be viewed as selling opportunities rather than signs of a genuine reversal.
