Last week, Chainlink (LINK) recorded its largest monthly loss, dropping 26.8% after strong sell-offs in the market.
Some market indicators suggest that this downtrend will continue before a major price change occurs.
Key resistance level for LINK
The current downtrend may be a strategy of market participants to push the price down to a favorable level, where buying activity is strong enough to overcome the significant barrier around the price of $23.78.
According to the In/Out of Money Around Price (IOMAP) index, this resistance area contains 110.43 million LINK sell orders from 96,760 addresses, forming a 'bottleneck' for any bullish moves.
However, according to the IOMAP index, LINK could drop to the demand area between $14.27 and $16.65, where there are 152 million buy orders from 72,890 addresses, creating enough momentum to counteract selling pressure.
When the price reaches this demand area, LINK will have enough momentum to break through the resistance level.
Whales affecting market activity
Whales are one of the sources of downward pressure on LINK over the past week.
The net money flow of large holders over the net money flow of exchanges tracks whale activity compared to retail investors, showing increased sell-offs from whales.
This index reached 0.27% at the time of writing, indicating that whale market activity increased by 30.26%.
If LINK drops to the demand area between $14.27 and $16.65, these whales may join the current buyers, pushing the price higher.
LINK price analysis
Fibonacci retracement levels and technical indicators such as the Relative Strength Index (RSI) can signal potential price movements.
Fibonacci levels help identify support and resistance points. Currently, LINK is trading just above the support level of $18.01. If this level is not maintained, the price will find the next support at $14.52, aligning with the demand area according to IOMAP.
The RSI index, measuring price momentum and identifying overbought or oversold conditions, shows that LINK is approaching the oversold zone.
At the time of writing, the RSI is at 34.16, implying strong selling pressure. If the price hits $14.52 with the RSI below 30, a reversal may occur as selling pressure eases.
Overall, whales may not be the only factor determining LINK's next bullish move. If selling pressure eases and buying activity returns, a price recovery could occur.