Amid the ongoing uncertain cryptocurrency market sentiment, Chainlink (LINK) is poised for a price decline as it has formed a bearish price action pattern on its daily time frame. In addition to LINK’s bearish outlook, its price has started declining alongside other major cryptocurrencies.
LINK Price Momentum
At press time, LINK is trading near the $10.52 level and has experienced a price decline of over 2.7% in the past 24 hours. During this period, its trading volume has dropped by 19%, indicating lower participation from traders and investors, potentially due to the bearish price action pattern.
LINK Technical Analysis and Upcoming Level
According to expert technical analysis, LINK has formed a bearish head-and-shoulder price action pattern on the daily time frame. Additionally, with the recent price drop it has broken its crucial descending trendline support, which has been in place since August 2024.
Based on the recent price momentum, if LINK breaches the neckline of this bearish pattern and closes a daily candle below the $10.30 level, there is a strong possibility that the asset could experience a 13% price decline, potentially reaching the $9 level in the coming days.
As of now, LINK is trading below the 200 Exponential Moving Average (EMA) indicating a downtrend. Traders and investors often watch the 200 EMA when building positions, whether on the long or short side.
Bearish On-Chain Metrics
LINK’s bearish outlook is further supported by on-chain metrics. According to the on-chain analytics firm Coinglass, LINK’s Long/Short ratio currently stands at 0.82 level, indicating strong bearish market sentiment among traders. Additionally, its future open interest has increased by 5.2% in the past 24 hours, which is currently a bearish sign for LINK holders.
Whenever the long/short ratio is below 1 and open interest increases, it indicates that traders have started shorting.
Currently, 54.84% of top traders hold short positions, while 45.16% hold long positions. It appears that traders have started betting on the short side as they believe that the price will go down.
