Chainlink’s Dramatic Descent: A Bull’s Last Hope or Just a Fading Dream?

by

Ah, Chainlink! Once a noble steed of the crypto realm, now has found itself stumbling beneath the $10 threshold, barely scraping its hoofs upon the ground at a dismal $8.9-an unfortunate feat not seen since the fateful September of 2024.

As the clock strikes reporting time, our dear LINK trades at a heart-wrenching $9.1, down by 7.9% in just one day and a staggering 21% over the week. The bears are dancing merrily while the bulls appear to be on an extended vacation, perhaps sipping cocktails on a sunny beach far from this chaos.

It seems, as AMBCrypto so astutely observed, that a grand sell-off has swept through the market like a whirlwind, leaving sellers to reign supreme. One can almost hear the echo of their laughter as they jettison their holdings.

Chainlink Hits September 2024 Lows Amid Massive Sell-Off

With LINK falling below the hallowed $10 mark, long-term holders have acted like startled chickens, flapping and squawking as they dump their assets with wild abandon. One must wonder if they’ve mistaken their investments for old shoes, fit only for tossing.

Indeed, the seller’s strength has soared to a resounding 75, while buyers seem to have retreated to the shadows at a meek 25. It’s a classic case of seller dominance, akin to a game of musical chairs where all the chairs have mysteriously vanished.

Meanwhile, the sell volume has surged to an impressive 26.2 million, contrasting sharply with a mere 22.2 million in buy volume. The negative delta of 4 million is a testament to the fact that sellers are truly calling the shots here.

In an equally grim twist, exchange activity reflects this bearish sentiment. The spot market resembles a deserted wasteland, with buyers nearly evaporated. On February 1st alone, over 2.8 million LINK made a swift exit into exchanges, followed by an additional 973.2k the next day. In total, 3.8 million Chainlink [LINK] have left the premises, presumably looking for greener pastures.

On the contrary, only 2.3 million LINK remain on exchanges, leading to a rather sad negative delta. It appears our dear LINK is on a one-way trip out the door!

Consequently, Chainlink’s Exchange Netflow has spiked to a staggering 1.4 million-certainly a clear indication of aggressive dumping. The market conditions resemble a scene from a tragicomedy, with players bowing off stage before the curtain falls.

Exposure Hits a Yearly Low

As for the Futures side of things, investors have decided to pack their bags, significantly reducing their exposure. According to CoinGlass, Open Interest (OI) has plummeted to a paltry $458 million-a yearly low worthy of a dramatic gasp.

Derivatives Volume too has taken a nosedive, dropping 22% to $1.09 billion. If one were to imagine capital fleeing in terror, this would be it. With $318 million in Futures Outflow compared to a meager $312 million in inflow, the Futures Netflow has slid down to -$6.49 million, signaling substantial selling.

Historically, such combined selling pressure from both spot and futures markets often precedes further calamity, as if the market were an anxious cat preparing to leap off a high shelf.

Can LINK Hold the $9 Support Level?

With Chainlink extending its bearish streak, holders are panicking like rabbits caught in headlights, aggressively closing positions. Consequently, our altcoin’s Relative Strength Index (RSI) has tumbled into oversold territory at a shocking 20.

This drop suggests a strong seller dominance that only propels the downward momentum further. Often, these dark clouds suggest a storm is brewing, and the last three days have been especially ominous.

Should this seller dominance continue unabated, LINK may very well slip below the $9 support level, perhaps tumbling toward the uncharted depths of $8.3-a fate worse than a bad haircut.

To turn this ship around, LINK must reclaim and close above its Short-term Moving Average, EMA20, at $11.5. Such a feat would be nothing short of miraculous-a bullish reversal straight out of fairy tales.

Final Thoughts

  • LINK has descended to a September 2024 low of $8.99 before managing a slight rebound to $9.1 at press time.
  • Chainlink has undergone a considerable sell-off across both spot and futures markets, with Open Interest reaching an annual low.

Read More

2026-02-02 13:26