CoinDesk Report:
Traders have taken short positions on LINK. As of press time, LINK has traded negative for the third consecutive day.
Chainlink is currently undergoing one of its most challenging periods in recent months, breaking several key support levels over the past 24 hours. This steep decline in price has severely impacted market sentiment, leading to a shift in dominance towards sellers. Long-term implications may suggest continued bearish pressure and potentially further declines in LINK’s price.
Chainlink Breaks Support
Chainlink’s price trend has been bearish over the past three days. Indeed, according to AMBCrypto’s analysis, the downtrend began on June 3, with a 5.70% drop pushing the price to around $13.5.
The following day, the altcoin dropped another 7.66%, reducing its price to approximately $12.5. As of press time, it is trading around $12, having fallen over 4% again previously.
The analysis also highlights significant shifts in Chainlink’s technical indicators. The moving averages, represented by yellow and blue lines, have flipped from support to resistance levels.
These resistance levels currently stand at price levels of $15.6 and $16.2.
Additionally, due to recent cryptocurrency devaluation, previous support levels around $13.8 and $12.8 for the altcoin have turned into resistance.
These findings suggest increased selling pressure in the LINK market recently, which could prevent altcoins from noticing a trend reversal.
Sellers Dominate LINK Market
Analysis of Coinglass’s weighted funding rate shows significant changes over the past 24 hours. By the end of trading on July 4, the funding rate had dropped sharply to around 0.0016%.
This indicates that despite the rate decrease, buyer interest still persists above zero — a slight sign of optimism.
However, another set of data presents more intriguing observations — a plunge in the funding rate to -0.0143. This sharp decline can be interpreted as a sign of shifting market dynamics, where sellers now outnumber buyers. A negative funding rate also implies more traders are taking short positions, betting on further declines in LINK.
Where Does Chainlink Go Next?
Chainlink’s weighted funding rate indicates a substantial number of short positions, highlighting strong bearish sentiment in the market. To reverse the market, buyers would need to exert significant effort to overcome prevailing sentiment.
Furthermore, Chainlink’s Relative Strength Index (RSI) appears close to the 30 threshold. A drop below 30 would officially place it in oversold territory.
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Historically, such downturns in this area could catalyze a market reversal, as potential buyers may perceive the asset as undervalued and begin accumulating, potentially driving up prices. Therefore, if buyers respond to perceived discounts, the ongoing market conditions could lay the groundwork for a possible turnaround.
