Chainlink (LINK), one of the leading cryptocurrencies in the decentralized oracle space, is showing signs of vulnerability as selling pressure rises and market sentiment turns cautious. After a promising rally in mid-June, LINK’s momentum has stalled, fueling concerns among investors that the bulls may be losing control and a deeper price correction could be on the horizon.

On June 16, Chainlink’s price briefly surged by about 16%, fueled by a modest 2% gain earlier that day. This rally gave many traders hope that LINK could continue to climb higher. However, those hopes faded quickly. Over the next 24 hours, LINK’s price dropped by roughly 3%, signaling that the upward momentum was fragile. This price action occurred alongside Bitcoin’s (BTC) own uncertain movements, which have been influenced heavily by ongoing geopolitical developments in the Middle East. Bitcoin’s price fluctuated between expected bullish support near $102,000 to $104,000 and resistance at $108,000 to $110,000, contributing to an overall cautious atmosphere across the crypto markets.

Technically, Chainlink is currently testing an important support level around $13.20. This mid-range support is critical, as it could act as a safety net to prevent further declines. Yet, several technical indicators are flashing warning signs. The On-Balance Volume (OBV) metric, which measures buying and selling pressure, shows dominance by sellers, while the Relative Strength Index (RSI) is in bearish territory, reflecting weakening buying interest. These signals suggest that while a short-term bounce off $13.20 is possible, traders should be prepared for a price dip below the key $12.64 level. Falling under this support could open the door to losses extending to $12.10 or even the June low near $10.80.

Adding to the bearish outlook, supply zones highlighted by IntoTheBlock data indicate significant selling pressure near $13.60 to $13.90, where many investors hold their positions. Breaking through this zone would require strong demand. Beyond that, another supply zone lies between $14.00 and $14.40, which may also prove difficult for bulls to overcome without substantial buying momentum. Given Chainlink’s weak price action in June, these hurdles appear formidable.

However, some positive signs emerge from exchange netflow data. Over the past week, approximately 261,000 LINK tokens, valued at $3.44 million, have flowed out of exchanges. Such outflows often indicate accumulation, as investors move their holdings into private wallets, expecting future gains. Despite this, the 30-day netflow data show a mixed picture, with around 79,000 LINK tokens worth over $1 million moving into exchanges, suggesting some traders remain willing to sell or trade LINK. This ongoing tug-of-war contributes to the price volatility and uncertainty.

Bitcoin’s future movements remain a critical factor for Chainlink’s outlook. A strong Bitcoin rally beyond resistance levels could boost overall market sentiment and help lift LINK prices. Conversely, a Bitcoin pullback or continued sideways trading might increase selling pressure on altcoins like Chainlink. Traders should watch Bitcoin’s price action closely as an indicator of potential shifts in LINK’s trajectory.

For traders, caution is advised. The $13.20 support level is crucial for determining short-term opportunities. A rebound here might offer a chance to buy, but a break below $12.64 could signal a deeper correction. Resistance areas between $13.6 and $14.4 should be considered important exit or shorting points. The bearish technical indicators currently suggest sellers have the upper hand, and until a clear trend reversal emerges, risk-averse investors may want to avoid heavy exposure.

In summary, while Chainlink’s mid-June rally briefly revived optimism, the growing selling pressure and bearish signals suggest the bulls are facing tough resistance. With key support levels under threat and uncertain Bitcoin influence, LINK’s near-term outlook looks cautious. Investors and traders alike should remain vigilant, closely monitoring support and resistance zones and be prepared for potential volatility. As always, in the fast-paced crypto market, staying informed and adaptable is essential.