Chainlink’s native token, LINK, has been exhibiting bearish price action recently, following the general downtrend in the cryptocurrency market. Major assets like Bitcoin (BTC), Ethereum (ETH), and XRP have also experienced significant price declines, contributing to an overall negative market sentiment. As a result, LINK’s price is expected to see a potential drop in the coming days.

Bearish Technical Indicators for Chainlink (LINK)

Technical analysis of LINK’s price suggests a bearish outlook. A double-top pattern is forming on the four-hour chart, which is often associated with a trend reversal. Although this pattern has not yet fully materialized, the current market dynamics, combined with a bearish divergence, point toward a decline. A bearish divergence occurs when the Relative Strength Index (RSI) peaks while the price forms new highs, signaling weakening momentum.

If LINK’s price closes below the key level of $16.15, there is a strong likelihood of a 22% price drop, potentially taking LINK down to $12.75 in the near term. This scenario is being further supported by historical price momentum, which indicates that such a price movement is possible based on similar patterns observed in the past.

Current Price Action and Market Behavior

At the time of writing, LINK is trading around $16.31, marking a 4.5% drop in the last 24 hours. The increase in trading volume by 12% shows heightened activity in the market, with more traders reacting to the ongoing price changes. This surge in volume indicates that the market sentiment is firmly bearish, with more traders opting to bet against LINK’s price in the near term.

Traders Favoring the Bearish Side

Data from on-chain analytics platform Coinglass highlights that many intraday traders are leaning heavily toward the bearish side. The current market structure shows that traders have built $10 million worth of short positions compared to just $4 million in long positions, reflecting the prevailing pessimism. With key support levels identified at $16 on the downside and $17.50 on the upside, the bears seem to be in control, and there is a strong possibility of LINK’s price dipping further if these levels are broken.

Conclusion: Bearish Outlook for Chainlink

Overall, Chainlink’s LINK token appears to be at risk of experiencing a 22% price decline in the short term. The bearish double-top pattern and RSI divergence suggest that the price may fall towards the $12.75 level. While the market sentiment remains bearish, it’s crucial for traders to closely monitor key price levels, as any significant changes could either accelerate the downtrend or trigger a reversal.