One of Chainlink’s biggest strengths over the past year has been the adoption rate of its product suite. And, while that makes a big difference overall on the price action, it also pushes investors into the asset.
Contrary to expectations, alas, the same is not happening with Chainlink at the moment.
Chainlink loses its links
Despite the altcoin’s 40.92% rally in the last 20 days, LINK is losing interest from its investors day by day. In fact, less than 2,000 investors appeared to be trading on-chain at press time.
The aforementioned finding can also be supplemented with the most significant indicator of the same – network growth. The metric highlights the adoption rate of the asset. After LINK failed to reach a new ATH like other alts, adoption began to slip.
At the time of this writing, it had dropped 69% on the charts.
Additionally, the wavering confidence of LINK holders is another cause for concern. This is the reason why in the four days following March 12, more than 3,000 investors left this market.
Due to this investor apprehension, their activity has been reduced. Therefore, most of the time, LINK ends up sitting idly by in their wallet. As a result, the rate at which LINK changes hands has also decreased significantly.
Now, expecting behavioral changes following major ecosystem developments is understandable. However, just yesterday, after Chainlink announcement another Chainlink – Filecoin grant for DZK Rollups, little optimism was seen.
Even so, LINK reached a major milestone this month – The end of its downtrend. After being stuck below the downtrend wedge for nearly 11 months following multiple failed breakout attempts, the altcoin is finally eyeing sustainable upsides.
What do the charts say about price action?
Trading at $17.7 at press time, LINK reset the 50-day SMA (blue) as support and was about to test the 100-day SMA (pink). The only successful retest of the 100-day SMA was in August 2021, when LINK jumped 153%.
This, however, will not be the case this time as according to the MACD, the downtrend is back.
The red signal line is gradually approaching the establishment of a bearish crossover by breaking above the blue MACD line. If the bars in the indicator turn red, expect a trend reversal which would make sense given the current position of the Relative Strength Index.
Holding slightly below the overbought zone, the indicator could reverse the trend and lead the price to likely consider a consolidation or correction.
If LINK consolidates, the altcoin sees $20.99 as its next major resistance. Returning to this level would be the first sign of a successful recovery.