Chainlink (LINK) has seen significant volatility this week. Its price has fallen more than 13% from Monday’s high, pushing LINK to a critical support level around $11.20. Traders and investors are closely watching this crucial area.
Related reading
Data from Santiment confirms the importance of this level, showing that demand for LINK is slowing down. This increases the uncertainty surrounding the asset’s price movement in the near term.
The next few days will be crucial as Chainlink hovers around this crucial support. The outcome here could determine whether LINK stabilizes and regains its footing or faces further decline. This level is likely to pave the way for LINK’s next major move, making it a crucial point of interest for market participants.
Is demand for Chainlink slowing down?
Uncertainty and fear are currently driving market sentiment towards Chainlink (LINK) as its price tests a crucial support level amidst declining demand.
Data on the chain from Santiment Highlights market weakness. Negative divergence between price and daily active addresses (DAA) confirms the recent decline in demand for LINK. This metric compares the price movements of an asset to changes in the number of daily active addresses, providing insight into whether network activity supports price action.
Currently, LINK’s price divergence on the DAA index is -61.2%. This indicates a large gap between its price and the number of active users on the network. This large negative divergence indicates market weakness and suggests that further price declines are likely.
Related reading
The lack of network activity to support the current price level is raising concerns. Traders and investors are concerned that LINK may struggle to maintain its position above the crucial support level at $11.20. If demand does not recover soon, LINK may face additional downward pressure, which could lead to a deeper correction in the coming days.
LINK price shows frequency
Chainlink is trading at $11.22 after losing its 4-hour 200 moving average (MA). This crucial indicator is now acting as resistance on the lower timeframe. This development has put LINK in a precarious position, with immediate support at the $10.91 low recorded on Tuesday.
Holding above this level is essential to maintain the uptrend potential. If the stock holds this support, the price could enter a period of sideways consolidation, paving the way for a potential push towards local highs next week.
However, the stock could face further downside pressure if it fails to hold the $10.91 support level. Key levels to watch include $9.50 and a local low of $8.12. A breakdown below these levels could signal a deeper correction, which could lead to a downtrend.
On the other hand, holding above $10.91 could provide the basis for a recovery. This could allow LINK to retest higher resistance levels and possibly continue its upward trend. Traders and investors are closely watching these price levels to determine the next move for LINK.