It appears that Chainlink (LINK) might hit a few setbacks soon, with some key signals hinting at possible corrections right ahead. After staying in a stable zone for a while, LINK’s daily active addresses have begun to decrease, which suggests that people might be losing interest.

Additionally, LINK’s Average Directional Index hitting 30 is indicating a strong trend that could stick around for the next week.

Worries increase with the appearance of a death cross pattern in the EMA lines on April 1. This shows a likely decrease in LINK’s price soon, which could mean more corrections on the way.

Chainlink’s Activity Signals Market Caution

An analysis of Chainlink’s daily active addresses sheds light on the cryptocurrency’s market dynamics, revealing key trends and shifts in investor engagement.

Throughout the first three weeks of March, LINK’s daily active addresses demonstrated stability, oscillating between 4,700 and 4,900. This period of equilibrium, however, took a turn on March 20, leading to a noticeable decline in engagement.

From March 21 to March 25, Chainlink’s daily active addresses decreased from 4,407 to 3,826, indicating a loss of momentum. Despite a brief phase of stability from March 25 to March 30, the onset of April marked another downturn, with daily active addresses falling further to 3,627.

This consistent decline signals a potential decrease in interest in Chainlink, which could adversely impact its market price. The market might perceive this reduced activity as a lack of confidence in Chainlink’s value, potentially triggering a downward price movement as demand decreases.

Moreover, the Average Directional Index (ADX) for Chainlink saw a substantial rise, jumping from 9.6 on March 31 to 30.2 by April 2. This increase indicates an important change in market sentiment and momentum.

The ADX, which measures the strength of a trend regardless of its direction, suggests that an ADX value below 20 reflects a weak or absent market trend, whereas a reading above 25 means a strong trend. Given Chainlink’s ADX of 30.2, it points to a robust downward momentum.

LINK’s Price Might Drop Below The $16 Mark

On April 1, the LINK 4-hour price chart revealed the formation of a death cross, suggesting a possible downtrend. This technical event occurs when the shorter-term Exponential Moving Average (EMA) dips below the longer-term EMA, typically indicating a transition from a bullish to a bearish market trend.

Unlike simple moving averages (SMAs), EMAs give more weight to recent price data, making them more responsive to price changes.

For Chainlink, the widening separation between the EMA lines post-death cross suggests an intensification of bearish momentum. This divergence, indicative of a dominant selling force in the market, has the potential to push prices downward. A breach of the $17.3 support level could see Chainlink’s price falling to the $16.2 mark.

On the flip side, should an upward trend occur, LINK’s price has the capacity to rally, breaking through resistance levels to possibly reach $20.7 or even climb into the $22 territory.

The post Chainlink (LINK) Holders Beware With Possible Downtrend Just Ahead appeared first on Coinfomania.