• Chainlink hovers near $8 on Tuesday, holding steady after the 7% rebound on Sunday.
• The Chainlink ecosystem shows steady growth, with wallets holding at least 1 LINK reaching a three-year high.
• LINK focused Exchange Traded Funds recorded $1.81 million in inflows, extending the streak of institutional inflows since December.
• Retail interest rebuilds in LINK derivatives, with an over 4% rise in Open Interest, while investor sentiment remains mixed.

Chainlink (LINK) price hovers near $8.00 at press time on Tuesday, reflecting a mild recovery after hitting a two-year low of $6.99 on Saturday. Renewed capital inflows of about $1.81 million on Monday, amid a steady ecosystem growth, with wallets holding at least 1 LINK token reaching a fresh high, prompt a firm long-term outlook. 

Still, mixed investor sentiment in the derivatives market weighs on short-term price action, keeping the bias neutral to bearish.

Institutional inflows back the growing Chainlink ecosystem

Chainlink price has remained capped below $10 since February, following six consecutive months of losses totaling over 60%. Still, the on-chain data show significant community resilience, driving ecosystem growth. According to Santiment, the number of wallets holding at least 1 LINK token, typically linked to new users, hit 535,650 on Monday, the highest total since December 2022.

Although these low-volume wallets fail to dictate price trends, the consistent increase in their count points to gradual adoption and accumulation, supporting Chainlink's long-term outlook as a central player in oracle services, tokenized assets, and real-world asset infrastructure.

Corroborating the long-term outlook, institutional investors continue to accumulate LINK through Exchange Traded Funds (ETFs). Data show that the LINK-focused ETFs recorded $1.81 million in inflows on Monday, driving total net assets to $101.21 million. Notably, the LINK ETFs have maintained zero outflows since their inception on December 2. 

LINK derivatives stand on a knife-edge

Derivatives market sentiment often reflects short-term volatility in a high-leverage, risk-exposed setting. According to CoinGlass, LINK futures Open Interest (OI) is up over 4% in the last 24 hours to $373.06 million, reflecting an increase in the notional value of outstanding contracts as traders regain risk-on sentiment.

The OI-weighted funding rate of 0.0024%, up from the -0.0023% dip the previous day, reaffirms mild bullish investor sentiment. However, the $269,290 in total liquidations over the last 24 hours, led by $195,880 in long liquidations, highlights a biased wipeout of bullish positions as price remains muted below $8.00. 

The lack of upside continuation weighs down on highly leveraged long positions, keeping the sentiment rooted. 

Chainlink’s rebound teeters on an upside breakout

Chainlink trades below $8.00 at press time on Tuesday, up from a $7.79 low earlier on the day, reflecting steady buying pressure on lower levels. Still, LINK maintains a broader bearish bias as the 50-day Exponential Moving Average (EMA) at $9.04 and the 100-day EMA at $9.48 both sit well above spot, suggesting the broader recovery structure has weakened, while the 200-day EMA near $10.70 reinforces a higher-term cap.

From a technical perspective, the price remains capped by a persistent long-term resistance trendline formed by connecting the highs of November 11 and January 14.

That said, the momentum, though constructive, remains fragile. The Relative Strength Index (RSI) is at 35 on the daily chart, with an uptick from the overbought zone, reflecting easing selling pressure. Yet, the Moving Average Convergence Divergence (MACD) and signal line remain below zero, with a negative histogram, suggesting downside pressure still dominates despite the market edging toward oversold conditions.

On the top side, the initial barrier is seen around the February 11 low at $8.13, acting as support-turned-resistance near the S1 Pivot Point at $8.31. A decisive close above this zone could test the dynamic barrier of the 50-day EMA at $9.04.

On the downside, the S2 Pivot Point at $7.48 guards against a move toward the cluster of support at the February 6 low at $7.15 and the Saturday low at $6.99.

(The technical analysis of this story was written with the help of an AI tool.)