Chainlink Faces Bearish Pressure as Whale Activity and Profit-Taking Rise Amid Volatility

Chainlink Faces Bearish Pressure as Whale Activity and Profit-Taking Rise Amid Volatility

Chainlink’s on-chain activity is showing signs of a bearish trend as the asset continues to dip, prompting some investors to either lock in profits or mitigate losses.

In September, Chainlink experienced a bullish run, standing out against a broader crypto market downturn. The asset rallied from $9 to $13 during the final three weeks of the month. However, as October began, LINK took a sharp tumble, falling back to the $10 level. Although it has attempted to recover in the past two weeks, on-chain metrics indicate that a further decline may be looming.

According to IntoTheBlock data, the number of daily active addresses (DAA) in profit increased significantly from 155 to 600 over the past week, as LINK breached the $12 threshold. A rise in DAA in profit suggests that some investors might be preparing to cash out amid the asset’s heightened volatility.

At the same time, the number of DAA in loss also grew, climbing from 222 on October 20 to 263 on October 22. This uptick could imply that certain long-term holders are looking to minimize their losses.

Both of these movements suggest that LINK’s recent bullish momentum could face downward pressure due to potential sell-offs.

However, it’s worth noting that any broader market-wide bullish trend could help boost Chainlink’s performance as well.

Data from IntoTheBlock also reveals an increase in whale transactions, involving at least $100,000 worth of LINK. These transactions jumped from 54 on October 19 to 134 by October 22, totaling $361 million in value over the past week. Such a rise in whale activity, combined with increasing trading volume, typically contributes to heightened price volatility.

LINK has dropped 1.75% in the last 24 hours and is currently trading at $11.78, with a market capitalization of $7.38 billion and a daily trading volume of $320 million.