Chainlink (LINK) Could Drop To $8 If It Loses Current Support: On-Chain Data Reveals
August 29 2024 - 7:00AM
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Chainlink (LINK) has faced significant volatility this week. Its
price dropped over 13% from Monday’s high, bringing LINK to a
critical support level of around $11.20. Traders and investors are
closely monitoring this crucial area. Related Reading: LINK Surges
11% As Key Data Reveals Day Traders Are Locking Gains The
importance of this level is further emphasized by on-chain data
from Santiment, which shows that demand for LINK is cooling off.
This adds to the uncertainty surrounding the asset’s near-term
price action. The next few days will be pivotal as Chainlink hovers
around this crucial support. The outcome here could determine
whether LINK stabilizes and regains its footing or faces further
downside. This level will likely set the stage for LINK’s next
major move, making it a critical point of interest for market
participants. Chainlink Demand Cooling Off? Uncertainty and
fear are currently driving market sentiment for Chainlink (LINK).
Its price is testing a crucial support level amid declining demand.
On-chain data from Santiment highlights a weakening market. A
negative price-daily active address (DAA) divergence confirms the
recent decline in LINK’s demand. This metric compares an asset’s
price movements with the changes in its number of daily active
addresses, providing insight into whether network activity backs
the price action. Currently, LINK’s price DAA divergence
stands at -61.2%. This indicates a significant disconnect between
its price and the number of active users on the network. Such a
substantial negative divergence suggests a weakening market and
hints at the possibility of further price declines. Related
Reading: Ethereum (ETH) Eyes $3,000: Data Suggests Imminent
Breakout The lack of network activity to support the current price
level raises concerns. Traders and investors are worried that LINK
might struggle to maintain its position above the crucial $11.20
support. If demand does not pick up soon, LINK could face
additional downward pressure, possibly leading to a deeper
correction in the coming days. LINK Price Action Shows Indecision
Chainlink is trading at $11.22 after losing its 4-hour 200 moving
average (MA). This critical indicator now acts as low-timeframe
resistance. This development has placed LINK in a precarious
position, with the immediate support level being the $10.91 low
marked on Tuesday. Holding above this level is essential for
maintaining the possibility of a continued uptrend. If LINK
sustains this support, the price could enter a period of sideways
consolidation, setting the stage for a potential push toward local
highs in the coming week. However, LINK may face further downside
pressure if it fails to hold the $10.91 support. Key levels to
monitor include $9.50 and the $8.12 local low. A breakdown below
these levels could signal a deeper correction, potentially leading
to a bearish trend. Related Reading: XRP Remains Strong Despite
Market Pullback: Analyst Forecasts $500 By 2025 On the other hand,
holding above $10.91 could provide the foundation for recovery.
This could allow LINK to re-test higher resistance levels and
possibly continue its uptrend. Traders and investors are closely
watching these price levels to determine LINK’s next move.
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