Chainlink (LINK) Could Drop To $8 If It Loses Current Support: On-Chain Data Reveals

Chainlink (LINK) has faced significant volatility this week. Its price dropped over 13% from Monday’s high, bringing LINK to a critical support level of around $11.20. Traders and investors are closely monitoring this crucial area.

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The importance of this level is further emphasized by on-chain data from Santiment, which shows that demand for LINK is cooling off. This adds to the uncertainty surrounding the asset’s near-term price action.

The next few days will be pivotal as Chainlink hovers around this crucial support. The outcome here could determine whether LINK stabilizes and regains its footing or faces further downside. This level will likely set the stage for LINK’s next major move, making it a critical point of interest for market participants.

Chainlink Demand Cooling Off? 

Uncertainty and fear are currently driving market sentiment for Chainlink (LINK). Its price is testing a crucial support level amid declining demand.

On-chain data from Santiment highlights a weakening market. A negative price-daily active address (DAA) divergence confirms the recent decline in LINK’s demand. This metric compares an asset’s price movements with the changes in its number of daily active addresses, providing insight into whether network activity backs the price action.

Currently, LINK’s price DAA divergence stands at -61.2%. This indicates a significant disconnect between its price and the number of active users on the network. Such a substantial negative divergence suggests a weakening market and hints at the possibility of further price declines.

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The lack of network activity to support the current price level raises concerns. Traders and investors are worried that LINK might struggle to maintain its position above the crucial $11.20 support. If demand does not pick up soon, LINK could face additional downward pressure, possibly leading to a deeper correction in the coming days.

LINK Price Action Shows Indecision

Chainlink is trading at $11.22 after losing its 4-hour 200 moving average (MA). This critical indicator now acts as low-timeframe resistance. This development has placed LINK in a precarious position, with the immediate support level being the $10.91 low marked on Tuesday.

Holding above this level is essential for maintaining the possibility of a continued uptrend. If LINK sustains this support, the price could enter a period of sideways consolidation, setting the stage for a potential push toward local highs in the coming week.

However, LINK may face further downside pressure if it fails to hold the $10.91 support. Key levels to monitor include $9.50 and the $8.12 local low. A breakdown below these levels could signal a deeper correction, potentially leading to a bearish trend.

On the other hand, holding above $10.91 could provide the foundation for recovery. This could allow LINK to re-test higher resistance levels and possibly continue its uptrend. Traders and investors are closely watching these price levels to determine LINK’s next move.