LINK is still in trouble as on-chain metrics signal further downturn

After a 157% price surge during the first half of August, which saw LINK hit a new all-time high of $ 20.11, it entered a major downtrend. As orders started to pick up, LINK fell 36%, reaching as low as $ 12.8 on Aug. 21.

However, over the past few days, the decentralized token oracles rebounded after the buy signal presented by the Tom Demark (TD) Sequential indicator.

LINk 2

Although the uptrend formation is estimated to have one to four bullish candlesticks daily, various on-chain metrics indicate further deterioration.

LINK network growth declined

Since mid-August, market participants are likely to stay away from buying LINK tokens.
This can be seen in the way the network has shrunk since then.

Around 10,000 new addresses join the network daily around Aug. 13. Now, the number of unique addresses has plummeted 66%. Around 3,400 new daily addresses are currently being created, which can be seen as a sign of a significant discount.

LINk 3

Source: IntoTheBlock

Brian Quinlivan, director of marketing and social media at Santiment, believes the network’s growth is “one of the most accurate price predictors.” An increase or decrease in user adoption over time can help observers understand the health and well-being of any given cryptocurrency.

“Generally, a rising network growth leads to a rising price of any project over time, in most cases. On the flip side, declining network growth for a long enough stretch can usually indicate a future slumping price with the lack of newly created addresses constantly in-flowing the coin or token”.

Given the current shrinking rate of LINK’s network, it may be reasonable to assume that its price could have more room to fall. However, there is a major supply barrier under the decentralized token oracles that could potentially keep the price down.

Support ahead

In case of a correction, IntoTheBlock’s “In / Out of the Money Around Price” (IOMAP) model reveals that there is an important level of support for LINK. Based on IOMAP, nearly 15,400 addresses previously purchased more than 21.3 million LINK from $ 15.3 to $ 14.4.

Such a critical supply barrier could potentially absorb some of the selling pressure. If the price drops to this level, hodlers who are sitting in profits on their positions could avoid the tragedy. They can even buy more tokens to allow the price to rebound.

Source: IntoTheBlock

On the other hand, IOMAP showed LINK below a strong resistance. About 6,000 addresses are holding more than 21 million LINK from $ 15.8 to $ 16.2. This important area of ​​interest shows that the bulls will struggle to push the price up even further. Hence, the next major price movement will depend on a breakdown of any of these levels.

You can see the LINK price here.

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