Chainlink's Downward Spiral: What's Driving the 20% Drop?Where to buy MAGA coin online
Over the past ten days, Chainlink's native token LINK has experienced a significant 19% price correction, currently trading around $14.32. This downward movement has caused the cryptocurrency to breach crucial support levels, with $14 now becoming the next critical threshold.
The technical indicators paint a concerning picture. The Moving Average Convergence Divergence (MACD) continues to show bearish momentum despite some weakening in selling pressure. Should LINK fail to hold above $14, analysts anticipate potential further declines toward $13, which would erase approximately half of the token's gains from the previous month.
Investor Behavior Could Worsen the Situation
Market data reveals approximately 34.97 million LINK tokens (valued at over $500 million) were acquired near current price levels. These holdings now sit precariously close to becoming unprofitable if prices dip below $14.08. Historical patterns suggest investors may choose to sell rather than risk losses, potentially accelerating the downward trend.
The Market Value to Realized Value (MVRV) ratio, currently at 18%, indicates many recent buyers remain profitable. However, Chainlink has historically experienced significant corrections when the 30-day MVRV enters the 13-24% range, suggesting we may be entering a danger zone for further price declines.
Potential Scenarios for LINK's Next Move
While the current momentum appears bearish, a decisive break above the $15 resistance level could invalidate the negative outlook. Such a move might propel LINK toward new yearly highs above $16.50. However, the weight of evidence currently favors continued downward pressure as investors appear likely to secure profits rather than hold through potential further declines.
The coming days will prove crucial for determining whether Chainlink can stabilize above key support levels or if we'll witness additional selling pressure as market participants react to these technical signals.