Chainlink has experienced a significant decline in its price, currently trading at $12.35, down from a year-to-date high of $30. This drop, exceeding double digits, has raised alarms among traders and analysts alike, particularly due to the formation of a troubling chart pattern observed on the weekly charts.
The technical analysis reveals that LINK has fallen below both the 50-week and the 100-week Exponential Moving Averages (EMA). More concerning is the breach of the Ultimate support of the Murrey Math Lines, which indicates a potentially risky situation for investors. A head-and-shoulders pattern appears to be developing, often regarded as a bearish reversal signal. The head of this pattern aligns with the peak at $30, marking a critical pivot point within the Murrey Math framework.
If Chainlink continues to decline and breaches the ascending trendline, the outlook remains bearish, with projections suggesting a potential drop to the oversold level around $8.
Despite these technical challenges, the fundamentals supporting Chainlink remain robust. Recent data indicates a reduction in the number of LINK tokens available on exchanges, now at 225.94 million, a decrease from 228 million earlier this month. This trend suggests that investors are moving their holdings into self-custody, a generally positive indicator in the cryptocurrency market.
Additionally, accumulation among Chainlink whales has increased over the past month, with holdings rising to 1.84 million, reflecting a 5.65% uptick. This accumulation could signal that investors are anticipating a rebound in price.
The ongoing inflows into the LINK ETF have also garnered attention, surpassing $58.6 million. The Canary Chainlink ETF now boasts assets exceeding $74 million, representing 0.85% of the overall market capitalization. Furthermore, Chainlink has been building its Strategic LINK Reserves, accumulating 1.23 million LINK tokens valued at over $15.3 million.
As the cryptocurrency landscape evolves, Chainlink is well-positioned to leverage the growth in Real-World Asset (RWA) tokenization, especially with major financial institutions like JPMorgan and Janus Henderson entering the space. Analysts remain optimistic regarding the long-term prospects for Chainlink, despite the current price pressures.
