Chainlink's LINK token has pulled back 4.78% over the last 24 hours to $7.34. Despite the short-term decline, Chainlink still shows signs of technical strength in the market.
Trading Volume Holds Up Well
Despite the 4.78% single-day drop, Chainlink's 24-hour trading volume reached $237.56 million. This level of liquidity shows there is still solid interest in trading LINK across exchanges.
Market Dominance Intact
With a market capitalization of $3.99 billion, Chainlink remains the 12th largest cryptocurrency. Its market dominance sits around 0.33%, largely unchanged over the past month. This indicates Chainlink maintaining its relative strength.
Monitoring Key Support at $7
Technically, Chainlink has found support around $7 multiple times over the past couple months. Now with this pullback, it will be important to see if $7 continues acting as support. If so, this could signal a bottom.
Longer Term Technicals Still Bullish
Despite the 4.78% single-day decline, Chainlink remains up 15.13% over the past month. The longer-term technicals still suggest an upward trajectory. As long as $7 holds as support, the uptrend could resume.
While Chainlink's price has dropped in the short-term, key indicators like trading volume, market dominance, and the $7 support level all point to continued technical strength for LINK. The recent dip could present a buying opportunity.
Should You Buy Chainlink After the Recent Dip?
With Chainlink down nearly 5% in the past 24 hours, some investors may view this pullback as a prime "buy the dip" opportunity. Dollar cost averaging can make sense for long-term focused investors. However, considering LINK remains in a short-term downtrend, traders may want to wait for a confirmed trend reversal.
If the $7 support level holds strong and LINK forms a clear higher low above this, it would signal the downtrend is potentially ending. Additionally, the RSI indicator hitting oversold levels could foreshadow a bottom forming. Until bullish signs confirm, caution may be prudent.
Is Chainlink a Good Long-Term Investment?
For investors with a multi-year time horizon, Chainlink remains one of the most promising blockchain projects to gain exposure to. As a decentralized oracle network providing real-world data to smart contracts, Chainlink has utility that makes it appealing for long-term holds.
Despite its recent struggles, Chainlink still ranks as a top 15 cryptocurrency by market cap. It has strong developer activity and adoption by enterprises needing oracle services. With real-world use cases, LINK has considerable long-term investment potential, especially at lower price levels.