As the broader cryptocurrency market grapples with uncertain conditions, Chainlink (LINK) is showing signs of potential bearish movement. Traders and analysts are closely monitoring the token’s price action, as key indicators suggest that LINK could face a 13% decline in the near future. With a bearish head-and-shoulders pattern forming and on-chaintoken metrics highlighting market pessimism, many are wondering: is LINK headed for a major price drop?
LINK’s Price Struggles Amid Bearish Sentiment
At the time of writing, Chainlink is trading at approximately $10.52, having experienced a price decline of 2.7% over the past 24 hours. During the same period, LINK’s trading volume dropped by 19%, signaling waning participation from traders and investors. This drop in volume coincides with the token’s bearish price action pattern, which has raised concerns about LINK’s future price trajectory.
Technical Analysis: Bearish Indicators Emerge
Chainlink’s price chart is flashing warning signs. The token has formed a classic bearish head-and-shoulders pattern on its daily time frame—a formation that traders often associate with upcoming price declines. Moreover, LINK recently broke below a crucial descending trendline that had been in place since August 2024, further strengthening the case for bearish momentum.
Should LINK close a daily candle below the $10.30 level, it could confirm the breakdown of the head-and-shoulders pattern. If this happens, analysts predict that LINK could see a 13% price decline, potentially dropping to around the $9 level in the coming days. Adding to the bearish outlook, LINK is currently trading below its 200-day Exponential Moving Average (EMA), which signals a downtrend and makes the token less attractive for bullish investors.
Bearish On-Chain Metrics Reinforce the Downtrend
The technical outlook is not the only factor weighing on LINK. On-chain metrics also suggest that market sentiment is turning against the token. According to Coinglass, a leading on-chain analytics firm, LINK’s long/short ratio is currently 0.82, indicating strong bearish sentiment among traders. Typically, when the long/short ratio is below 1, it means that more traders are betting on the price declining than rising.
Furthermore, LINK’s future open interest has increased by 5.2% in the past 24 hours—a bearish indicator in this case. An increase in open interest, combined with a low long/short ratio, suggests that traders are taking short positions in anticipation of further price drops.
Currently, 54.84% of top traders hold short positions, while 45.16% are long on LINK, reinforcing the idea that the majority of market participants expect the token to decline in value.
What’s Next for Chainlink?
Given these bearish indicators, LINK appears to be at a critical juncture. If the token fails to hold the $10.30 support level, a 13% decline to the $9 mark seems likely. However, much will depend on how the market reacts in the coming days, particularly as traders and investors await further clarity on the broader cryptocurrency market’s direction.
For now, Chainlink’s price remains under pressure, and traders should watch key levels closely. If LINK manages to hold above $10.30 and reverse its bearish pattern, it could offer a buying opportunity. However, if the bearish trend continues, a further decline may be inevitable.
Conclusion
Chainlink is facing a challenging environment as bearish sentiment grows among traders and on-chain metrics point to further downside potential. With key technical indicators and market sentiment aligned for a decline, LINK could be on the verge of a significant price drop. Traders and investors should keep an eye on the $10.30 support level and prepare for potential volatility in the days ahead.
