One of Chainlink’s greatest strengths over the past year has been the speed with which the product suite was adopted. And while that as a whole makes a big difference to the price action, it also drives investors to the asset.
Unfortunately, the same thing is happening with Chainlink at the moment.
Chainlink is losing its links
Despite the 40.92% rally of the altcoin in the past 20 days, LINK is losing interest from its investors by the day. In fact, fewer than 2k investors appeared to be transacting on-chain at press time.
The above finding can also be supplemented by its main indicator – network growth. The statistic underlines the level of asset acceptance. After LINK failed to hit a new ATH like other alts, adoption started to slide.
At the time of writing, it had fallen 69% on the charts.
In addition, the shaky confidence of LINK holders is another concern. This was the reason why more than 3k investors exited that market within four days of March 12th.
This fear of investors has reduced their activity. Consequently, LINK is usually left idly in their wallets. As a result, the rate at which LINK changes hands has also dropped significantly.
Now it is understandable that we expect behavioral changes after major ecosystem developments. However, yesterday, after Chainlink announced another Chainlink – Filecoin grant for DZK Rollups, not much bullish was seen.
Still, LINK has reached one major milestone this month: the end of its bearishness. After being stuck under the downward trend wedge for nearly 11 months, following multiple failed breakout attempts, the altcoin is finally looking at some sustainable hikes.
What do the charts say about the price action?
LINK was trading at $17.7 at the time of writing, turning the 50-day SMA (blue) back into support and was close to testing the 100-day SMA (pink). The only successful retest of the 100-day SMA was in August 2021, when LINK shot up 153%.
That won’t be the case this time, however, as bearishness is creeping back up again, according to the MACD.
The red signal line is getting closer to establishing a bearish crossover by overtaking the blue MACD line. If the bars on the indicator turn red, you can expect a trend reversal which would make sense given the current position of the Relative Strength Index.
The indicator, which is only slightly below the overbought zone, could reverse the trend and lead to the price likely consolidating or seeking correction.
If LINK consolidates, the altcoin sees $20.99 as its next major resistance. Pulling back from that level would be the main signal of a successful recovery.