Market Sentiment and Price Action
Social sentiment surrounding Chainlink and its native cryptocurrency, LINK, has surged over the last 24 hours. This increase in positive sentiment was anticipated, given LINK’s price prospects and recent commentary from Grayscale regarding Chainlink's significance.
The LINK price experienced a substantial discount over the past few months as liquidity withdrew from the markets. For context, the cryptocurrency fell as low as $11.60 on Friday, representing a 57% discount from its highest price point in 2025.
Notably, Friday's low marked the first time the LINK price was oversold since March of this year. However, this was not the lowest price point observed this year. The lowest price was recorded during the October 10th crash, which saw the price retreat to $7.9. Nevertheless, this latest price correction prompted the LINK price to retest its long-term ascending support line once again.
The LINK price has previously bounced off this same support line on multiple occasions. Therefore, bullish expectations may stem from this retest, but it might not be the sole reason behind the escalating hype.
Grayscale Injects Confidence for LINK Investors
Investment management firm Grayscale recently characterized Chainlink as essential infrastructure for the tokenized segment. According to Grayscale, the protocol's unique position as an oracle services provider means it plays a crucial role in the data pipeline for the decentralized world.
Grayscale's statement about Chainlink highlights a potential reason why LINK could be an attractive cryptocurrency for investors, particularly now as crypto investors seek value cryptocurrencies at recently discounted prices. Furthermore, Grayscale already manages a Chainlink trust, offering its investors exposure to LINK.
Additionally, LINK was among the cryptocurrencies with promising ETF prospects, especially as the narrative around ETFs has been gaining momentum. Beyond the improving market sentiment surrounding Chainlink, the network has also demonstrated positive signs in key metrics. Recent data indicates that Chainlink has been outperforming top networks, including Solana, in terms of development activity.
Can Chainlink (LINK) Demand Pull Off Strong Recovery?
At press time, LINK was already up by over 7% from its lowest price point on Sunday. While this suggests that the bears have eased their selling pressure, allowing for some accumulation, the state of demand will ultimately determine whether LINK can extend its recovery.
Interestingly, large order book flows did not indicate a strong eagerness to buy back among whales. Spot flows in this category remained in the red, and the same applied to derivatives positions. Overall spot flow data across exchanges reflected similar sentiments. LINK spot outflows have cooled down substantially in the last few days. However, they remained negative, indicating that demand for the cryptocurrency is still weak.
The derivatives segment showed comparable observations. Open interest remained relatively subdued near the $510 million level, and volumes were down by approximately 30% in the last 24 hours. These data points suggest that the slight upside seen over the weekend may lack follow-through. However, this will depend on the market's mood throughout the current week.
The weak demand for LINK during the weekend suggests that investors remain cautious, especially in light of the diminished demand observed over the past few weeks. Analysts have been anticipating clear signs of a shift in market sentiment, contributing to the current uncertainty surrounding LINK's price prospects.