Chainlink Faces Short-Term Correction and Bearish Reversal Risk
Chainlink (LINK) is experiencing a short-term decline, with its price down over 3% on Wednesday. This weakness is attributed to easing demand from both institutional and retail investors. LINK-focused Exchange Traded Funds (ETFs) have seen three consecutive days of zero inflows, a significant drop from the $8.30 million recorded last week. Despite this, there has been little selling pressure, with the last outflow recorded on August 13.
On the retail side, Chainlink futures are showing reduced leverage exposure. Open Interest (OI) for LINK futures has decreased by 5.55% over the last 24 hours to $679.27 million, indicating a decline in active positions. Total liquidations reached $1.86 million, primarily driven by long liquidations, suggesting a sell-side dominance.
Technically, Chainlink is facing downside risks. The cryptocurrency is trading below $13.50, with immediate support near $13.10. The 50-period Exponential Moving Average (EMA) on the four-hour chart near $14.00 acts as an overhead barrier. Momentum indicators, such as the MACD and RSI, are reinforcing the downside bias.
To reverse the bearish trend, LINK must reclaim the 50-period EMA and the downward-sloping resistance trendline near $14.00. A confirmed breakout could extend toward last week's high around $15.77.