Chainlink has rejected the $7 support level for the third time, with technical indicators suggesting sellers are losing momentum as the token shows signs of potential bullish reversal. According to AMBCrypto analysis, LINK's price broke below an ascending trend channel in late May but has now formed a potential bottom at the $7.20 zone. The momentum indicator is declining and has flipped negative, while four-hour candles are consolidating around $7.280 with MACD bars becoming faint, indicating sellers are getting exhausted. LINK has bounced off the 0.618 Fibonacci retracement level, though for a downtrend continuation, it depends on LINK breaking below the $7.20 zone. The token remains in a bearish channel that has guided prices lower since June 22, but the latest price action suggests aggregate liquidations have greatly reduced, a signal that precedes expansion.
Chainlink Spot ETFs turned positive again after recording their first daily outflow of $490K on June 22, with $138K flowing into the ETFs the next day, relieving bulls and helping to stabilize the token's price action. As per AMBCrypto data, LINK ETFs have been among the best-performing altcoin ETFs, with only Avalanche [AVAX] Spot ETFs yet to see outflows since their debut. More importantly, LINK demand is high with the reserve hitting a new peak, as the Chainlink Reserve accumulated 593,088 LINK for over $4.60 million in June, bringing the total holding to 4,504,167 LINK and helping create a supply crunch. This institutional demand contrasts with the broader market weakness, as LINK fell about 4% in the past 24 hours and remains roughly 86% below its 2021 high of $53.
The most significant recent development came with the June 23 launch of Project Pangea, a global foreign-exchange infrastructure initiative developed alongside European and South Korean banking consortia representing more than $10 trillion in assets under management. However, this institutional milestone created a sell-the-news reaction as traders locked in profits following the launch. The initiative strengthened Chainlink's long-term enterprise case, but short-term sentiment deteriorated ahead of Friday's estimated $11 billion crypto options expiry, which pushed many digital assets toward their max-pain levels and triggered liquidations across leveraged altcoin positions. More than 50 banks participate in Project Pangea for T+0 foreign-exchange settlement, with JPMorgan, UBS, ANZ, Fidelity International, SBI, DTCC, Euroclear, and Mastercard having built infrastructure around Chainlink's technology, though these partnerships represent infrastructure adoption rather than direct token demand.
Macro conditions remain unfavorable with Bitcoin's drop below the $60,000 level weighing on the broader altcoin market as investors reduced exposure to risk assets. Consecutive weeks of U.S. spot Bitcoin ETF outflows, expectations that the Federal Reserve could keep interest rates elevated for longer, and delays surrounding U.S. crypto legislation further reduced appetite for speculative assets. At the same time, institutional capital continues rotating into artificial intelligence-related equities instead of digital assets. Derivatives positioning has offered little relief, with leveraged long liquidations accelerating as LINK lost successive support levels, while declining open interest and cautious positioning suggested traders have reduced directional exposure rather than attempting aggressive dip buying. On June 25, over 1 million LINK in leveraged long orders were liquidated on Binance's perps market, but upon forming the potential bottom at the $7.20 zone, only 120K LINK have been wiped out.
