Chainlink (LINK) has recently reclaimed its daily trendline, with bulls defending the $12.25 level amidst mild upside momentum. However, on-chain activity has dropped sharply, raising concerns about the short-term direction of the altcoin. Despite this, fundamentals and reserves hint at potential recovery.
Currently, LINK is retesting a crucial breakdown zone after breaking a year-long ascending trendline. The $12.25 level has become a key battleground for bulls, with downside targets at $10 and $7.50 in focus if support fails to hold. While the technical outlook shows a potential shift in trend with the recent break above a descending trendline, weak momentum suggests further consolidation around the key support area.
As of now, LINK is trading at $12.67, with bulls needing to maintain pressure above $12.25 to confirm a sustainable reversal. A strategic collaboration with Pi Network aims to enhance decentralized applications through real-time data integration, strengthening Chainlink’s smart contract capabilities. However, market reaction has been muted, indicating a focus on technical structure over fundamentals in the short term.
Exchange reserve data shows a 0.2% drop in the last 24 hours, with total LINK on exchanges now at 156 million. This decline in exchange-held supply suggests diminishing sell-side pressure, typically seen during accumulation phases. If this trend continues, it could support higher prices, especially with rising demand.
Whales currently control 46.1% of LINK’s supply, with a 1.41% decrease in holdings over the past month. Retail participation has increased by 1.77%, with investor holdings rising marginally by 0.36%. This redistribution may indicate growing interest from smaller market participants, despite minor outflows from whales.
However, address activity data shows a slowdown, with new addresses, active addresses, and zero-balance addresses decreasing significantly over the past week. This lack of network activity could limit LINK’s upside potential unless volume and participation increase across the market.
In conclusion, Chainlink’s current setup reflects a market in limbo, balancing structural shifts and declining on-chain engagement. The $12.25 level is crucial for bulls, supported by lower exchange reserves and positive partnerships like the one with Pi Network. Yet, fading user activity and decreased whale involvement raise caution. A decisive bounce above current levels could spark momentum, but failure to hold may lead to a deeper correction for LINK. There are many reasons to consider when writing a detailed article. Some key points to consider are the topic, audience, research, structure, and tone. By carefully considering these factors, you can create a compelling and informative article that engages readers and provides valuable information.
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