Chainlink is flashing three warning signals that could point to a deeper correction following its recent rally, according to crypto analyst Ali Martinez.
For context, LINK surged nearly 95% from around $7 to a recent high of $13.77. However, Martinez’s latest analysis suggests that the rally may be losing momentum as technical and on-chain indicators turn increasingly cautious.
Martinez Issues Three Warning Signals For Chainlink
He highlighted three warning signals, indicating that Chainlink’s recent rally may be fading.
TD Sequential Flashes a Sell Signal
The first warning comes from the TD Sequential indicator, which has flashed a sell signal on LINK’s weekly chart.
The signal appeared after LINK climbed 95% from its recent low near $7. The strong rally has delivered substantial gains to holders, increasing the likelihood that some traders could take profits at current levels.
Consequently, the bearish TD Sequential signal could point to a period of consolidation or a potential pullback if buying pressure continues to weaken.
LINK Whale Activity Declines
Meanwhile, whale activity has also dropped sharply. Martinez noted that transactions worth more than $1 million have fallen from roughly 59 over the past two weeks to around 10 as of the time of the post. The decline suggests that large LINK holders have become significantly less active as the token trades near its recent highs.
Although falling whale activity does not necessarily indicate that major investors are selling, it points to weaker participation from large market players. Therefore, reduced whale activity could make it more difficult for LINK to sustain its recent upward momentum without renewed buying pressure.
1.75 Million LINK Sent to Exchanges
The third warning signal involves the growing number of LINK tokens sent to exchanges. According to Martinez, around 1.75 million LINK has recently moved to exchanges. As a result, the amount of LINK held on exchanges increased from about 269.25 million to roughly 271 million tokens.
Rising exchange balances can sometimes signal increased selling pressure because investors often transfer tokens to trading platforms when they intend to sell. Nevertheless, exchange inflows alone do not confirm that holders are preparing to dump their tokens, as investors can also move assets for trading, liquidity, or other purposes.
Taken together, the three indicators present a more cautious short-term outlook for Chainlink.
LINK Pulls Back From Recent Highs
Meanwhile, LINK has already given up some of its recent gains. The coin is currently trading at around $12.51, representing a 5.18% decline over the past 24 hours.
Despite the latest pullback, LINK remains significantly higher across longer timeframes. It is still up 50.93% over the past month and 9.05% over the past week.
Therefore, the current decline remains a pullback from a strong rally rather than clear evidence of a broader trend reversal.
Van de Poppe Maintains Long-Term Bullish Outlook
While Martinez is highlighting potential short-term risks, analyst Michaël van de Poppe remains highly optimistic about Chainlink’s long-term prospects.
Van de Poppe has suggested that LINK is the only cryptocurrency he believes could potentially turn a $10,000 investment into $100,000 by 2029.
His outlook contrasts with Martinez’s near-term warning signals, highlighting the difference between short-term market risks and long-term expectations for Chainlink.
Evans Kelvin
