Since the second quarter of the year, many altcoins, including Chainlink (LINK), have struggled to make significant gains. This is in stark contrast to their performance between January and March.
As a result, the market has shifted aggressively towards uncertainty and fear. But will LINK survive this time?
Low Network Activity Threatens Chainlink’s Revival
One metric that highlights Chainlink’s weak performance is the divergence between price and daily active addresses (DAA). This metric helps determine whether network activity is supporting price movement.
When active addresses, which measure user participation in the blockchain, increase along with the price, the cryptocurrency in question may reach a higher value. If network activity increases and the price falls, it means that a breather may be near, as this is a buy signal.
However, a decline in DAA is usually a bearish signal. As shown below, the divergence between LINK and DAA is -56.35%. This negative divergence indicates a weak relationship between the altcoin price and user engagement.
Read more: What is Chainlink (LINK)?
The In/Out of Money Around Price (IOMAP) indicator also supports this view. IOMAP classifies addresses based on whether they are in profit, in loss, or at breakeven.
If an address purchased a token at a price lower than the current value, it is considered “in the money.” Addresses that purchased at a higher price are “out of the money,” and those that purchased at the current price are breakeven.
The more addresses in a given price range, the stronger the support or resistance at that level. According to IntoTheBlock, about 5,540 addresses bought 4.46 million LINK at about $10.16, putting them in the money. In contrast, over 8,000 addresses bought 17.94 million LINK at about $10.52, putting them out of the money.
Based on the conditions stated earlier, LINK price may not have enough support to prevent another downtrend. Instead, it may face resistance, potentially falling to $9.72 in the coming days.
LINK Price Prediction: Token Seems Set at $9.72
Two weeks ago, LINK broke out of a bear pennant, a technical pattern that signals a continuation of a downtrend. The refutation of the bearish bias at the time saw LINK’s price reach $12.62.
However, the altcoin later fell by 19.38%, suggesting that the previous spike was fake. From the daily chart shown below, Chainlink bulls may be working to push the price higher.
Additionally, the resistance at $10.73 suggests that the cryptocurrency may not hold its uptrend. If that happens, a significant pullback could be next. According to the Fibonacci retracement indicator shown on the chart, LINK’s next target is around $9.72.
Read More: Chainlink (LINK) Price Prediction 2024/2025/2030
This prediction could prove invalid if the broader altcoin market sees a resurgence. If that happens, LINK price could break through the $10.73 resistance and potentially reach $11.55.
