Chainlink Drops Below $9 – Only Hope for Bulls Lies Ahead

Chainlink has recently fallen below $10, reaching a low of $8.9, marking its lowest point since September 2024. At the time of reporting, LINK was priced at $9.1, indicating a daily decline of 7.9% and a substantial weekly drop of 21%, a clear sign of strong bearish sentiment. This decrease was primarily attributed to a significant sell-off, with sellers overpowering buyers in the market.

Key Takeaways

Chainlink (LINK) has dropped to $8.9, below $10 for the first time since September 2024.
The market shows extreme seller dominance, with sell volumes surpassing buy volumes significantly.
Future exposure for LINK has diminished, reaching a yearly low in open interest.
The Relative Strength Index (RSI) sits in oversold territory, indicating potential for further declines.
A crucial support level at $9 could be at risk if selling pressure continues.

CHAINLINK LINK

Chainlink’s Lows Amid a Huge Sell-Off

Following LINK's dip below the $10 mark, many long-term holders and traders in both the spot and futures markets reacted with panic and sold extensively. This mass selling led the seller’s strength metric to reach 75, while buyer strength plummeted to 25, exemplifying the dominance of sellers in the market.

Chainlink buyer seller strength Source: TradingView

Simultaneously, the sell volume increased to 26.2 million while buying volume only reached 22.2 million. This activity resulted in a negative market delta of 4 million, further indicating seller dominance. Meanwhile, exchange movements confirmed this bearish trend, as buyers nearly vanished from the market. On February 1st, over 2.8 million LINK entered exchanges, followed by 973.2k LINK the next day, totaling 3.8 million LINK flowing into exchanges.

Chainlink exchange netflow Source: CryptoQuant

Only 2.3 million LINK remains in exchanges, indicating an overall negative delta. Consequently, Chainlink's Exchange Netflow surged to 1.4 million during this timeframe, clearly signaling aggressive spot selling.

Futures Exposure Hits a Yearly Low

On the futures side, investor exposure has significantly decreased. Data from CoinGlass shows that Open Interest (OI) has fallen to a yearly low of $458 million.

Chainlink open interest Source: CoinGlass

Meanwhile, Derivatives Volume has decreased by 22% to $1.09 billion, revealing notable capital exits. The altcoin experienced $318 million in Futures Outflow compared to $312 million in Inflow, resulting in a Futures Netflow decline of -$6.49 million, indicating extensive selling in the futures market. Historically, selling pressure in both the spot and futures markets has led to more downward momentum and price drops.

Will LINK Sustain the $9 Support Level?

Chainlink has continued its bearish trend as investors anxiously closed positions, driving the altcoin’s Relative Strength Index (RSI) further into oversold territory at 20. This drop signifies strong seller dominance, increasing selling momentum. Such market conditions often precede further price declines, as seen over the last three days.

LINK RSI & EMA Source: TradingView

If seller dominance persists, LINK may see additional losses. Continued selling could push LINK below the critical $9 support level, potentially reaching $8.3. To counteract this bearish trend, LINK must recover and close above its short-term Moving Average, EMA20, at $11.5 to pave the way for a significant bullish reversal.

Conclusion

In summary, Chainlink is under considerable selling pressure, struggling to maintain its value amidst a bearish market environment. As the situation develops, investors will be closely monitoring whether LINK can secure its support levels and turn the tide in favor of a bullish recovery.