Key Insights:
- Chainlink’s price has dropped nearly 50% since its August high, with a significant decline in total value locked (TVL) in DeFi protocols.
- A death cross looms on the 1-day chart, signaling the potential for continued price losses unless the support holds.
- Whale activity has increased, with a 20% rise in holdings, which may help stabilize prices near current support levels.
Chainlink’s price has been on a steady decline, down nearly 50% from its yearly high of $27.70 in August. As of November 17, the cryptocurrency is trading at approximately $14.05, showing a marked downturn. The ongoing decline is largely attributed to broader macroeconomic challenges, including concerns over U.S. tariffs on key economies and diminishing expectations of another rate cut by the Federal Reserve in December.
Alongside the market-wide headwinds, data reveals a sharp decline in Chainlink’s presence within the decentralized finance (DeFi) sector. The total value locked (TVL) in Chainlink-based DeFi protocols has dropped significantly, falling from $1.13 billion in late August to just $608 million. Furthermore, weekly fees generated by these protocols have fallen by 45%, indicating weakened demand for Chainlink’s oracle services.
Price Faces Key Support and a Potential Breakdown
On the technical front, Chainlink’s price has formed a multi-year symmetrical triangle pattern, often considered neutral. However, recent movements suggest that the price may be heading toward a breakdown below the lower boundary of the triangle. Historically, this type of breakout has often been followed by significant price action. Should this breakdown occur, the next key support level lies at $11.06, coinciding with the 38.2% Fibonacci retracement level. A drop below this support would likely signal further downside, with a potential target of $10 or lower.
Additionally, Chainlink is approaching a death cross on the 1-day chart, a bearish signal that occurs when the 50-day simple moving average (SMA) crosses below the 200-day SMA. This pattern has been a reliable indicator of sustained downtrends in the past. If confirmed, the death cross could signal further losses in the coming weeks, adding to the pressure on Chainlink’s price.
Whale Activity Shows Promise Amid Market Struggles
Despite the bearish sentiment, some signs of renewed interest in Chainlink are emerging. Data from Nansen reveals that the amount of LINK tokens held by whale addresses has risen by 20% over the past week, reaching a total of 2.06 million LINK. This increase in whale holdings may provide some support, as experienced market participants could help stabilize prices near the current support levels.
However, while this could potentially limit the severity of a further decline, the overall outlook for Chainlink remains bearish, with the risk of continued downward pressure if the broader market conditions do not improve.
