The price of Chainlink (LINK) may fall when facing the risk of take profit.

Chainlink (LINK) has stood out in the crypto market with an impressive growth rate of over 109% in the past year. In just the last three months, the price of LINK has recorded an increase of about 68.5%.

However, the past week has shown signs of weakness as the price of LINK has dropped by more than 9%. Both on-chain indicators and technical charts suggest that the one-year upward trend may be losing momentum, at least for the time being.

Profit-taking pressure increases as investors are in profit

One of the clearest signs is that the percentage of LINK supply that is profitable is still maintaining at a historically high level. As of August 29, nearly 87.4% of the total circulating supply is profitable, close to the peak of 97.5% recorded on August 20. This peak coincides with the price of LINK rising to 26.45 USD, but shortly after, it quickly adjusted down more than 6% to 24.82 USD the following day.

Chainlink price and supply are in profit | Source: GlassnodeLooking back, we also see a similar pattern. On July 27, the profit supply ratio reached 82.8%, just before LINK adjusted from 19.23 USD to 15.65 USD, resulting in a 19% decrease. The current level near 87% once again indicates that the risk of profit-taking is increasing.

The LINK capital flow shows signs of decreasing price | Source: TradingViewThe Chaikin Money Flow (CMF), which monitors the inflow and outflow of capital, has been on a downward trend since August 22 and dropped below 0 for the first time on August 29 since August 6. This shift into negative territory indicates that buying pressure is weakening and the inflow of capital is decreasing, reinforcing the likelihood of a correction.

Chainlink price action indicates exhaustion

The daily chart also reinforces this caution. The price of LINK is currently trading at 23.31 USD, within an expanding wedge pattern — a structure often associated with a loss of upward momentum near the end of a bullish phase. This “neighborhood speaker” pattern often signals the beginning of bearish reversals, a risk that is currently threatening LINK.

LINK price analysis | Source: TradingViewThe important support level to watch is 22.84 USD. A decisive break below this level will open up the next downside target at 21.36 USD, and if the price drops below this level, it could lead to a deeper correction, ranging from 6% to 19%, as seen in previous “Profit Taking” peaks.

Conversely, if the price of LINK can recover and surpass the level of 25.96 USD, it may still execute another bullish rally. However, even this recovery will not completely reverse the larger exhaustion signals unless LINK can convincingly break above the level of 27.88 USD.

Mr. Giáo