Escalating tariff tensions have put Chainlink (LINK) in a difficult position. The asset has faced many obstacles in regaining upward momentum over the past week, while the recent negative sentiment of traders further exacerbates LINK's unfavorable outlook.
Traders are increasing Short positions on LINK
As of July 8, data from the on-chain analysis tool CoinGlass shows that traders have a pessimistic view of the market, with a significant reduction in betting volume.
They have used too much leverage at price levels of $12.99 (support below) and $13.83 (above) — thresholds where trading activity is very strong.
According to on-chain data, traders have opened Long positions worth a total of $5.87 million and Short positions worth a total of $8.64 million. Therefore, LINK is currently in a downtrend and seems to be preparing for a correction.
Additionally, the Long/Short ratio of LINK is currently at 0.935. Specifically, 48.32% of traders are betting on Long positions, while the remaining 51.68% are holding Short positions at the time of writing.
Thus, in the context of escalating tariff tensions, traders maintain a negative outlook and are cautious when participating in the market.
Chainlink: Important thresholds to watch
Technical analysis shows that LINK is at a decisive moment.
Over the past two weeks, this asset has consolidated in a narrow range and has now approached a significant resistance level, formed by a downtrend line.
In the past, whenever the price reached the current resistance level, LINK was rejected and turned down. This is the fourth time the asset has tested this resistance level.
Potential upcoming price milestones for LINK
If market sentiment does not change and the price drops below $12.7, LINK could face a potential decline of up to 17%.
Conversely, if market sentiment improves and breaks through this extended resistance area, while closing the daily candle above the trend line, it could open up strong upward opportunities.
At the time of writing, LINK is trading below the 200-day exponential moving average (EMA 200) on the daily timeframe, indicating that the asset is still in a downtrend.
This trend can only be reversed if the price exceeds both the EMA 200 and the $16 resistance level.