Chainlink (LINK) token raises questions as it hovers around $13.4, showing signs of weakening momentum. With bearish signals, ambiguous on-chain indicators, and uncertain technical outlook, investors may anticipate a correction or a temporary pause before a new rally.
Chainlink appears to be displaying on-chain movements signaling a potential local price decline. Holders are showing a willingness to sell based on short-term price fluctuations.
Source: Santiment
Chainlink has been one of the top performers among the 20 largest assets in the crypto market. Over the past week, it recorded a 13.2% price increase. This recovery came after losses experienced ten days ago, when LINK dropped from $13.38 on June 19 to $10.94 on June 22. This massive sell-off followed Bitcoin’s drop to $99,000. It came in the wake of escalating tensions in the Israel-Iran conflict and subsequent US bombings against Iran.
Since then, market sentiment seems to have improved. However, Chainlink holders haven’t demonstrated long-term conviction. On-chain indicators have noted another flurry of token movements following the recent rebound, which could be a concerning sign for short-term bulls. Historically, Chainlink’s development activity has been high among DeFi tokens. Since mid-April, development activity has been declining.
This stagnation has raised some concerns for investors. Despite the considerable pullback, LINK’s development activity remains relatively high compared to most other altcoins, so investors don’t have too much to worry about. One factor that will concern bulls is the persistence of selling signals that accompanied Chainlink’s price increase toward the demand zone at $12.
Dormant circulation experienced a significant spike on March 14, when the token attempted to bounce from the $12 support. Another dormant circulation spike occurred on June 20, when the price was falling toward the $11 mark.
High dormant circulation indicates a flurry of on-chain token movements, typically signaling selling intentions. The recent price drop was accompanied by a wave of selling, highlighting a lack of confidence among holders.
Furthermore, examining the average coin age showed no considerable network-wide accumulation. Holders were ready to take profits when the price rebounded toward the $16 level. They also panicked when the price approached local lows. This was another sign of a weak HODLer mentality.
The exchange net position change tracks fluctuations in LINK supply held in exchange wallets. A positive change implies more inflows to exchange platforms, which is typically a sign of strong selling pressure. Currently, the net position change remains positive, which is a concerning sign for LINK bulls.
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