Chainlink's LINK Drops 5.25% Amid Bearish Pattern Formation

Chainlink, the decentralized oracle network, has recently experienced a significant downturn, with its native token LINK dropping by 5.25% following the formation of a bearish pattern near the 200-day Exponential Moving Average (EMA) and a descending trendline. This decline comes after a 22% rally, during which sellers stepped in near key resistance zones, preventing the price from breaking above the 200-day EMA and forming a bearish structure that suggests a potential reversal.

The price of LINK has been trading around $14.40, with a notable lack of interest from investors and traders, resulting in an 11% drop in trading volume over the past 24 hours. On-chain data indicates a 13% decline in Daily Active Addresses, signaling a decrease in user activity. Additionally, there has been a surge in bets on short positions, suggesting that both traders and investors may be preparing for further downside momentum.

According to on-chain analytics, the major liquidation levels are at $14.25 on the lower side (support) and $15.77 on the upper side (resistance). If the price continues to fall toward the $14.25 level, nearly $2.90 million worth of long positions could be liquidated. Conversely, if the price rises to $15.77, approximately $15.37 million worth of short positions could be liquidated. This indicates that more capital is stacked against LINK than in its favor, with traders appearing confident that the asset won’t breach the $15.77 ceiling in the near term.

From a technical standpoint, LINK has faced back-to-back rejections at a descending trendline and the 200-day EMA. Each rally toward these zones has sparked a steep sell-off, forming a series of lower highs. This third rejection aligns with historical price action, and if LINK fails to flip $15.77 into support, another 10% drawdown could drag the altcoin down to $12.70. A clean break above $16 is needed to shift momentum and reduce downside risks. Until then, the outlook for LINK remains cautious, with traders and investors closely monitoring the $14.25 support level.