Chainlink’s Price Stabilizes – Here’s Why Smart Investors Are Still Buying In

Despite fluctuations in the market, Chainlink (LINK) showcases resilient performance aided by strong fundamentals, attracting interest from savvy investors. While its price may have stalled around $12.79, indicators suggest potential movement when market conditions align.

Key Takeaways

Chainlink's price is currently around $12.79 and shows signs of stabilization after experiencing a falling wedge.
Momentum indicators like the RSI and MACD indicate cautious sentiment among traders; however, no decisive breakdown has occurred yet.
Liquidation data reveals strong liquidity above the $15 mark, suggesting potential upward movement.
Chainlink’s exchange-traded funds (ETFs) have continued to show inflows, indicating sustained investor confidence despite price stagnation.
Development activity on the Chainlink network remains high, supporting its long-term viability and commitment from contributors.

Chainlink's price stalls - But here's why smart money keeps moving in

Chainlink’s Price Stalls but Remains Resilient

In today’s fluctuating market environment, projects that exhibit consistent growth are easy to spot. Assets backed by strong fundamentals tend to maintain relative stability, even when market conditions are volatile. Chainlink, a notable player in the crypto space, is currently trading at approximately $12.79 as of December 16, following a failed attempt to sustain a breakout from a falling wedge pattern. However, this price point remains above an ascending support line, indicating a period of consolidation rather than a complete downturn.

LINK Shows Weakness, but Sellers Lack Control

Looking at the 4-hour chart, Chainlink (LINK) momentarily broke out of a falling wedge before dropping back below local resistance. This lack of follow-through has kept the price within a tight range, reflecting uncertainty.

Chainlink Price Chart
Source: TradingView

Momentum indicators indicate a cautious market. The Relative Strength Index (RSI) hovers around 33.57, a level that has historically correlated with local price bottoms. Meanwhile, the Moving Average Convergence Divergence (MACD) is subdued, showing limited strength towards either direction as LINK remains above its support level.

Liquidation Data Indicates Opportunities Ahead

Liquidation heatmaps reveal significant liquidity concentrations above the $15 threshold. Such clusters have previously been associated with market reactions in times of price compression, especially when downward momentum doesn’t follow through.

Liquidation Heatmap
Source: CoinGlass

On the other hand, liquidity below the current price appears thinner, suggesting that forced selling pressure is limited. Although a breach of the upward support could expose prices around the $10 mark, such a downward movement has not yet materialized as of this writing.

Positive ETF Flows Amid Stagnant Prices

Despite the stagnation in price, Chainlink's exchange-traded funds (ETFs) are experiencing positive inflows. Data from SoSoValue indicates that there have been no ETF outflows since their launch, highlighting sustained investments rather than distribution.

ETF Flows
Source: SosoValue

This disparity between price stagnation and inflow levels indicates that investors are maintaining their positions, showing confidence even with weakened short-term momentum.

Strong Fundamentals Persist Despite Price Decline

Data from Santiment ranks Chainlink among the top four cryptocurrency projects based on development activity over the last 30 days. While LINK may have slipped on price charts, its network activity remains robust, reinforcing long-term engagement from developers.

Chainlink Development Activity
Source: Santiment on X

Such discrepancies between price movements and underlying activity have historically coincided with stabilization phases rather than continued price declines.

Concluding Thoughts

Chainlink's current price situation reflects a complex interplay of market sentiment, fundamental development, and liquidity dynamics. While short-term price action appears muted, the underlying fundamentals might indicate that Chainlink is well-positioned for potential future growth. Investors should keep a close eye on momentum trends and liquidity shifts as the market evolves.