"LINK's Momentum Wanes as Profit-Selling Looms"
Chainlink (LINK) is facing a critical juncture following a year of significant gains, with the token currently trading at around $24.03. After a 115% increase in the past year and a 28% surge in the last month alone, the token is now showing early signs of exhaustion. As of August 29, 2025, approximately 87.4% of the circulating supply remains in profit—close to the recent high of 97.5%—highlighting the elevated risk of profit-taking among investors. This trend has historically preceded sharp corrections in the past year, such as the 19% drop in July when the supply in profit stood at 82.8% before falling to $15.65 from $19.23.
Technical indicators also point to weakening momentum. The Chaikin Money Flow (CMF), a key metric for tracking capital inflows and outflows, has turned negative since August 22 and fell below zero on August 29. This marks the first time in weeks that the metric has turned bearish and suggests fading buying pressure. On the daily chart, LINK is currently forming an ascending broadening wedge pattern—a formation often associated with waning upward momentum. The token’s price action is now testing a crucial support level at $22.84. A breakout below this level could expose further downside targets at $21.36 and potentially extend the correction by 6–19%, aligning with historical retracements seen during prior supply-profit peaks.
Meanwhile, on-chain data reveals that over 2.07 million LINK tokens were withdrawn from exchanges in just 48 hours, indicating a shift toward long-term storage and reduced selling pressure. This accumulation is supported by a whale who recently acquired 663,580 LINK tokens for $16.85 million, signaling renewed interest in the token. The Chainlink Reserve also added to the bullish narrative by purchasing 41,000 LINK tokens, valued at $1 million, raising its total holdings to 150,778 tokens.
Despite these positive on-chain flows, the broader market environment remains cautious. The Relative Strength Index (RSI) and Stochastic Oscillator (Stoch) remain above neutral levels but show signs of slowing bullish momentum. If LINK fails to stabilize near $22–$23, the next support level to watch is $20, which has historically attracted buyers. However, breaking above $27.88 would be necessary for bulls to regain control of the narrative and push toward $30–$34, where significant historical resistance lies.
The token has also received a major institutional boost through its partnership with the U.S. Department of Commerce. The collaboration aims to publish official U.S. economic data on blockchain networks, using Chainlink’s Data Feeds to make macroeconomic indicators like GDP and PCE index globally accessible. This move aligns with broader efforts by the U.S. government to position itself as a crypto capital, potentially expanding Chainlink’s use cases beyond DeFi into government and enterprise sectors.
In the near term, the market is likely to see consolidation between $21 and $27 as traders assess the strength of the current support and resistance levels. If the token manages to hold above $22.84, it could attempt a retest of the $27.4 level before challenging higher ground. However, a sustained breakdown would raise concerns about the sustainability of the year-long bullish trend.
The coming weeks will be pivotal for Chainlink as it navigates this first major test of its year-long rally. With both on-chain strength and technical fragility in play, the path forward will depend on whether institutional and retail demand can absorb the increased selling pressure and reinvigorate the token’s momentum.
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