Chainlink Gains 13.2% Amid Market Volatility, Selling Pressure Persists

Chainlink, one of the top 20 assets in the crypto market, has experienced significant price movements recently. Over the past week, it registered a 13.2% price gain, recovering from a slide that occurred ten days ago. During this period, LINK dropped from $13.38 on June 19 to $10.94 on June 22. This sell-off was triggered by Bitcoin's drop to $99k, which was influenced by escalating tensions in the Israel-Iran conflict and the subsequent U.S. bombing of Iran.

Despite the market sentiment appearing to recover, Chainlink holders did not show long-term conviction. On-chain metrics indicated another wave of token movement following the recent bounce, which could be an ominous sign for bulls in the short term. Historically, Chainlink's development activity has been high among DeFi tokens. However, since mid-April, this activity has been trending downward, causing some concern for investors. Despite this drop-off, LINK’s development activity remains relatively high compared to most other altcoins, suggesting that investors need not worry too much.

One factor that worries the bulls is the persistent sell-off signals that accompanied a Chainlink price move to the $12 demand zone. The dormant circulation saw a huge spike on March 14, when the token attempted to bounce higher from the $12 support. Another spike in dormant circulation came on June 20, when the price was dropping toward the $11 mark. High dormant circulation indicates a flurry of on-chain token movement, which generally signals an intent to sell. The recent price drop came alongside a wave of selling, underlining a lack of faith from holders.

Moreover, an examination of the mean coin age showed that there was no considerable network-wide accumulation. Holders were willing to take profits on price bounces toward the $16 level and also panicked as the price approached local lows. This was another sign of weak HODLer mentality. The exchange net position change tracks the change in LINK supply held in exchange wallets. A positive change implies more inflows to exchanges, which is usually a sign of high selling pressure. In late 2024 and early 2025, the positive net position change indicated profit-taking pressure. Similarly, the Chainlink mini-rally to $15.5 in late March was met with increased selling. On June 20, the exchange net position change pivoted green once again, underlining another wave of selling. At the time of writing, the net position change remained positive, which was a worrying sign for LINK bulls.

Chainlink was trading at the $13.4 local resistance, and the $14 region was another supply zone nearby. With key resistances overhead and increased selling pressure from holders over the past ten days, it appeared likely that LINK might have formed another local top and could trend downward in the coming days. This analysis suggests that Chainlink bulls should be cautious, as the current market conditions indicate potential downward pressure on the asset's price.