Chainlink Plunges 17%—Here’s the One Move That Could Spark a Stunning Comeback

Chainlink’s been dancing on the edge of a critical demand zone, hovering around $15.5, and if you ask me, the stakes couldn’t be higher. We’ve seen the profit-taking frenzy continue unabated, yet the latest metrics hint that the selling pressure might finally be easing up — but here’s the million-dollar question: is that enough to stop the slide from $19.5? Now, if you’re scratching your head wondering whether the worst dip is behind us or if the crypto rollercoaster has yet another loop ahead, you’re not alone. With Chainlink shedding over 17% since late July while Bitcoin tumbled almost 5%, the market’s mood is anything but settled. Still, the on-chain signals and technicals are throwing us a possible lifeline — though a decisive bounce remains far from guaranteed. Let’s dig deeper into what this means for LINK holders and those watching this space like hawks. LEARN MORE

Key Takeaways

Chainlink was nearing an important demand zone at $15.5. The profit-taking activity has not halted, but the metrics showed that this selling threat should reduce. Will this be enough to halt the retracement from $19.5?

Chainlink [LINK] prices have fallen 17.2% since the 28th of July. This retracement came alongside a Bitcoin [BTC] price drop of 4.9% from $119.8k to $113.6k.

However, on-chain and technical signals suggest the worst of the retracement may be over — but a bounce isn’t guaranteed just yet.

A distribution phase has been underway over the past ten days

The data from Santiment showed that the wave of profit-taking on LINK might be at an end.

Source: Santiment

The Dormant Circulation saw a sizeable spike on the 1st of August. It signaled increased on-chain token movement, and generally is a result of heightened selling activity.

It came alongside a 5.08% price drop for the day.

Meanwhile, the Mean Coin Age (90-day) — which had been trending higher — has steadily declined over the past two weeks. This drop aligns with the view of broader network distribution.

Another key metric, the MVRV ratio, also dropped with the Chainlink price, showing that holders were sitting on less profits than before.

The token movements highlighted earlier pointed to steady profit-taking in recent weeks. The threat from profit-taking activity to the price might be at an end as the MVRV approaches zero.

Can bulls reclaim control at $15.5?

Source: LINK/USDT on TradingView

The strongest argument for a Chainlink trend reversal was the price action of the past month.

Admittedly, the market structure was firmly bearish, and the RSI has fallen below neutral 50, at press time. The OBV was receding, and the evidence at hand showed bears were dominant.

If Chainlink had a bullish reaction, it would likely come from the $15.5 demand zone. It had been an important zone in the second week of July, where prices consolidated briefly before racing higher.

It also has confluence from the 50-day moving average. The Fixed Range Volume Profile from the beginning of July showed that the Value Area Low (dotted blue) was at $15.7.

Traders can keep an eye on Bitcoin too, to give clues for a LINK trend reversal.