Chainlink Faces 30% Drop Risk as Whale Activity Slows, Bitcoin Correlation Stays Strong

Chainlink (LINK) is showing signs of weakness, with technical indicators suggesting a potential 30% price drop before a possible recovery. Whale transactions have significantly declined, raising concerns about the altcoin’s buying pressure. Meanwhile, its high correlation with Bitcoin keeps LINK tethered to broader market movements.

Chainlink’s Price Struggles Amid Bitcoin’s Correction

After peaking around $30 in early December 2024, Chainlink has been stuck in a downtrend. Lower highs and lower lows define its price action, a typical sign of a bearish market.

As of Monday, February 17, LINK was trading at approximately $19.22 during the New York evening session, marking a 29% drop since the second inauguration of former U.S. President Donald Trump. Despite speculation that Trump’s return to office would benefit crypto markets, Chainlink and other major cryptocurrencies have struggled.

The sell-the-news effect appears to have played out, as investors took profits rather than doubling down on bullish bets. The broader crypto market correction, coupled with Bitcoin’s retracement toward $92,000, has contributed to LINK’s bearish momentum.

Whale Transactions Drop 78%, Raising Concerns

One of the biggest warning signs for Chainlink is the steep drop in whale activity. On-chain data from Santiment shows that the number of transactions exceeding $100,000 has plummeted from 298 in late November to just 66 in the past week.

This 78% decline in large transactions suggests big investors are stepping back, reducing liquidity and overall market confidence. Given that 67% of LINK’s total supply is held by large holders, their inactivity could weigh heavily on its price action.

One positive note is that 59% of LINK holders are still in profit. However, if selling pressure intensifies, that figure could drop, leading to further downside.

Technical Analysis Signals More Downside

Technical analysts are watching a bearish flag pattern forming in LINK’s price chart. Crypto analyst Ali Martinez points out that this setup often precedes a sharp move lower before a potential recovery.

A key support level to watch is the macro-rising logarithmic trendline. If LINK revisits this level, it could result in a 30% drop from current levels before any chance of a rebound.

Other technical factors adding to the bearish case include:

• Weak trading volume, signaling reduced market interest.
• Failure to hold above key moving averages.
• LINK’s correlation of 0.97 with Bitcoin, meaning any further BTC weakness could drag it lower.

Chainlink Expands Despite Price Weakness

While the price outlook may be uncertain, Chainlink’s fundamental growth remains strong. The network has recorded 22 new integrations across multiple blockchains, including Arbitrum and Base.

This expansion reinforces Chainlink’s role as the leading network for real-world asset tokenization. Its technology continues to be adopted across decentralized finance (DeFi), gaming, and traditional finance sectors.

Here’s a snapshot of Chainlink’s key fundamentals:

This data highlights the contrast between LINK’s growing adoption and its current market struggles. While the short-term technical picture is bearish, its long-term outlook remains tied to continued blockchain adoption.

For now, traders should brace for volatility, as LINK’s next move will likely depend on Bitcoin’s ability to stabilize. Until then, the risk of further downside remains high.