Chainlink's rising attention may not prevent a price dip to $8

Chainlink (CRYPTO:LINK) has been attracting significant attention from market participants, reflected in its rising social dominance. 

However, despite this spike in online discussions, indicators suggest that the hype surrounding LINK might not translate into sustained gains, with a potential decline still on the horizon. 

According to on-chain data from Santiment, LINK's social dominance surged to 1.24 on September 7, its highest since December 2023. 

Social dominance measures the share of conversations about a specific asset compared to the top 100 cryptocurrencies by market capitalization. 

An increase in this metric suggests a heightened focus on LINK within the broader crypto community. 

However, the increase in social dominance comes at a time when the number of addresses holding LINK has been decreasing. 

Since August 11, the number of holders has steadily declined, with the current total at 722,000. 

LINK's price has also suffered, dropping by 16% since August 26, as more holders have opted to sell amid the downturn. 

The bearish outlook for LINK is further supported by technical indicators. 

Despite a slight uptick in LINK’s price recently, a bearish divergence has formed between the price and the Chaikin Money Flow (CMF) indicator. 

While the price is trending upwards, the CMF has been moving downwards, indicating weakening buying pressure. 

This divergence suggests that the recent price rise lacks strong underlying volume and could signal a potential decline. 

If LINK fails to sustain its current uptrend, it could retreat to the $10.25 support level. 

If this level does not hold, the price could fall further to around $8.08. 

Conversely, if buying momentum strengthens and the uptrend is maintained, LINK could target a rally towards $11.24, potentially invalidating the bearish scenario. 

At press time, the Chainlink (LINK) price was $10.58.