ChainLink (Link) is one of the more powerful performers in the market, attracting over 109% over the past year. Over the past three months alone, link prices have increased by around 68.5%.
However, the past week has revealed weakness, with tokens slipping over 9%, suggesting that both on-chain metrics and technology charts may be missing steam for at least for now.
As owners benefit, the pressure to earn profits increases
One of the clearest signs comes from the proportion of link supply in profits, hovering at a historically high level.
As of August 29, nearly 87.4% of the circular supply was profitable, close to the 97.5% peak seen on August 20th. That peak coincided with the Link Price Rally and $26.45, pulling back to more than 6% the next day to more than $24.82.
If you see it further back, you will see the same pattern. On July 27th, the supply of profits was 82.8% just before the link was revised from $19.23 to $15.65. The current reading of nearly 87% is again unpleasantly high, hinting at an increased risk of profitability.
Additionally, Chaikin Money Flow (CMF), which tracks capital inflows and outflows, has fallen since August 22nd, falling below zero for the first time on August 29th since August 6th.
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ChainLink price action refers to bearish fatigue
Daily charts reinforce this attention. The link price is currently trading at $23.31, inside a vast rising wedge pattern. This is a structure associated with a loss of upward momentum near the end of the bull phase. This “megaphone”-like pattern is notorious for kickstarting a bearish reversal.
The main support to watch is $22.84. A critical break below this level exposes the next minus side target to $21.36 and if it falls below it, it could endanger deeper retracements. As experienced at the peak of local “profit supply,” it could be anywhere in the 6% to 19% range.
On the other hand, if the link price can regain $25.96, you can still try another move higher.
But even such a recovery will not completely overturn the wider fatigue sign unless the token breaks convincingly above $27.88.
Disclaimer
In line with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. Although Beincrypto is committed to accurate and unbiased reporting, market conditions are subject to change without notice. Always carry out your research and consult with an expert before making any financial decisions. Please note that our terms and conditions, privacy policy and disclaimer have been updated.
