Chainlink (LINK) faces the risk of falling an additional 15% amid the weakening of the derivatives market.

Chainlink (LINK) continues to plummet, hovering around the threshold of over 18 USD on Wednesday amid the severe fluctuations in the crypto market. In just the first few days of the week, this oracle token has lost about 10% of its value, thus reinforcing the pessimistic sentiment that is enveloping the entire market.

If buying power continues to be indifferent and misses the opportunity to “catch the bottom”, LINK may face the risk of plummeting by about 15%, retreating to the 15 USD range. In the context of weakened retail money flow and high price volatility, the adjustment pressure may last much longer than expected.

The decline of Chainlink continues due to the weakening derivatives market

Chainlink just recorded the strongest “liquidation of leverage” in history on Friday, when more than 167 million USD in Long positions and 16 million USD in Short positions were forced to be liquidated.

Although liquidation pressure has eased in recent days as prices have temporarily stabilized, volatility remains high, posing risks of further losses if the downtrend of Chainlink continues.

Chainlink liquidation data | Source: CoinGlassIn the derivatives market, cautious sentiment still prevails. Data shows that the open interest (OI) of the futures contract only edged up to about 737 million USD before dropping back to 704 million USD – a level it touched last weekend. If the risk-averse trend continues and OI continues to shrink, the downward pressure will increase, opening up the possibility for LINK to retreat deeper into the 15 USD range.

Open contract of Chainlink | Source: CoinGlass## Technical analysis: LINK is fluctuating between a series of negative signals

As of the writing of this article on Wednesday, Chainlink (LINK) is trading at around 18 USD, impacted by a widespread wave of corrections in the crypto market. The price maintaining below key exponential moving averages (EMA) — including the 200-day EMA at 19.08 USD, the 100-day EMA at 20.59 USD, and the 50-day EMA at 21.40 USD — reflects the prevailing pessimistic sentiment that may persist in the short term.

Daily LINK/USDT chart | Source: TradingViewThe downtrend continues to be reinforced by sell signals on the daily MACD indicator since Friday, indicating that investors are cautious and avoiding risks. At the same time, the Relative Strength Index (RSI) has retreated to the 38 zone, showing that selling pressure is clearly increasing. If the current technical trend is not reversed soon, LINK risks falling deep into the support zone of 15 USD — a level that was tested in early August.

However, it is still early to rule out the possibility of recovery. If buying pressure appears at the low price range, LINK could bounce back and test important resistance levels, respectively at the 200-day EMA (19.08 USD), the 100-day EMA (20.59 USD), and the 50-day EMA (21.40 USD).

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