Chainlink (LINK) Faces 19% Decline Risk as Selling Pressure Mounts

Chainlink (LINK) is currently facing a critical resistance level at $12.5, which is causing concern among investors and analysts. This resistance level has been a significant barrier for LINK, and its inability to break through this point has led to a bearish outlook for the cryptocurrency. The recent market metrics and on-chain indicators suggest that LINK may experience further declines, potentially targeting $10 and $7.5.

According to CryptoQuant, the elevated net deposits on exchanges indicate growing selling pressure, further supporting a bearish outlook for LINK. This increase in net deposits suggests that investors are transferring their assets from decentralized platforms to centralized exchanges, commonly to liquidate their positions. This pattern aligns with the technical bearish outlook for LINK, potentially justifying the recent price performance.

Leveraged traders play a crucial role in LINK’s short-term price action. Current liquidation heatmaps indicate a significant cluster of long liquidation levels around the critical $10 mark. This is noteworthy because market makers typically aim to exploit liquidity zones during volatile periods, heightening the risk of a cascade of liquidations if the price dips below this threshold. If LINK breaches the $10 mark, the resulting liquidation pressure may catalyze further declines, with the $7.5 level becoming increasingly probable as a target for rebounding prices. Consequently, it is crucial for LINK to hold above the $12.5 resistance levels to avert deeper market losses.

The prevailing trends indicate that Chainlink (LINK) is at a crossroads, with the $12.5 resistance seemingly holding back any potential recovery. Without a decisive move above this threshold, the path of least resistance appears downward, compounded by rising selling pressure from on-chain metrics and liquidation risks. Investors are encouraged to monitor these developments closely as LINK’s outlook remains uncertain amidst broader market volatility.