Chainlink (LINK) is at a critical juncture following a 22% retracement from recent highs, causing concern among investors. Weak on-chain data suggests that Chainlink’s network activity may be faltering, compounding market uncertainties.
Should the bearish sentiment continue, LINK could test the important support level around $9. A break below this level might lead to deeper declines, whereas a defense could aid recovery. Investors are watching these developments closely to gauge Chainlink's price direction.
Network activity, or the lack thereof, is a significant factor driving LINK's recent downturn. Data from Santiment shows a price-Daily Active Addresses (DAA) divergence of -56.35%. This negative divergence indicates that user engagement isn't supporting recent price actions.
The DAA metric, which measures user participation on the blockchain, is crucial for understanding whether network activity aligns with price movements. An increase in DAA generally supports higher prices, and a decrease signals potential trouble.
LINK's current price is $10.24, recovering slightly after touching a low of $9.84. However, it's still below the 4-hour 200 moving average (MA) of $10.80. The MA is seen as a critical indicator, and reclaiming it could shift momentum, targeting $11.50 next. Failing to hold might result in sub-$9 levels.
In summary, Chainlink's ability to reclaim the 200 MA or break below recent lows will be key in determining its next significant move.
