- Chainlink's Price Struggles With Resistance at $12.35 amid fading bullish sentiment
- Elevated NVT ratio indicates LINK may be overvalued compared to network activity.
- A drop below $10.79 could lead to a decline, while holding could push above $13.00.
Chainlink (LINK) has been under the spotlight recently. The shift in sentiment among investors might spell trouble for the altcoin. Despite an earlier surge in price, bearish signals are emerging, suggesting a potential drawdown.
Shifting Sentiment and Technical Indicators
Chainlink’s price has faced difficulties in surpassing the crucial resistance level of $12.35. Since late July, LINK has been buoyed by strong bullish sentiment.
This optimism helped prevent significant losses and even pushed the price upward in mid-August. However, this positive outlook appears to be waning.
The sentiment around LINK, although still above neutral, is on a decline. The Network Value to Transactions (NVT) ratio, a key metric to evaluate an asset’s valuation relative to its transaction activity, is now at its highest point in nearly five years.
This suggests that Chainlink may be overvalued compared to its actual network usage. Such an overvaluation could indicate the price is ahead of its fundamental value.
Resistance and Support Levels
Currently priced at $12.00, Chainlink is testing the $12.35 resistance level. This level has previously acted as a bounce-back point, so reclaiming it as support is vital for a sustained upward trend.
If LINK fails to hold this level, it might see a decline towards the local support at $10.79. A fall below this support could push the price down to $10.00, potentially erasing the recent 22% recovery seen in August.
Despite these bearish signals, a bounce off the $10.79 support could lead to a breakout above $12.35. This would open the door for LINK to climb beyond $13.00, challenging the current bearish outlook. Investors should watch these levels closely as Chainlink navigates its next moves.
The post Chainlink (LINK) Faces Crucial Resistance: Is a Price Correction Imminent? appeared first on Crypto News Land.