The price of Chainlink has increased slightly despite weakened demand from retail and institutional investors.

Chainlink (LINK) is trading steadily at the 12.50 USD level at the time of writing on Monday, reflecting the overall cautious but positive sentiment in the crypto market. This oracle coin is currently supported by relatively solid short term technical signals, reinforcing expectations for the ability to maintain its recovery momentum in the short term.

Nevertheless, investors should remain cautious about the prospect of a strong and prolonged breakout, as the level of interest from both individual investors and institutions in LINK has yet to show a significant improvement.

Chainlink is trading in the context of quiet activity from individual and institutional investors.

The derivatives market of Chainlink is still under significant pressure since the quick drop (flash crash) on October 10th. As of now, the open interest (OI) in the futures market has only reached an average of about 511 million USD. According to data from CoinGlass, OI — a measure of the nominal value of outstanding futures contracts — had previously maintained an average of 1.36 billion USD on the very day of the crash.

Although the current figure is still considered relatively high, OI in October has significantly decreased compared to the historical peak of 1.95 billion USD recorded on August 24. OI usually reflects the level of participation from individual investors; therefore, the weakening of the derivatives market is becoming a hindrance to the upward trend, increasing the risk of stifling the short term recovery of LINK.

Open contract (OI) of LINK | Source: CoinGlassOn the contrary, the spot ETF market of Chainlink continues to record a stagnant state. In the two days of Thursday and Friday, there were no inflows or outflows from related ETF funds. Previously, data from SoSoValue showed that inflows reached about 217,000 USD on Wednesday and 1.38 million USD on Tuesday.

As of now, the total accumulated net inflow of Chainlink ETFs is approximately 56 million USD, with an average net asset value of around 73 million USD. Notably, Grayscale's GLNK ETF is still the only Chainlink ETF listed and traded in the United States.

Statistics on Chainlink ETF | Source: SoSoValue## Technical outlook: LINK holds support, but there is still limited room for growth.

At the time of writing on Tuesday, Chainlink is fluctuating around the (EMA) 50-day exponential moving average at 12.75 USD, after recording a daily increase and reaching a short term peak of 12.95 USD.

On the 4-hour time frame, the (RSI) has climbed to 58, reflecting a significantly improving bullish momentum as buyers gradually gain dominance and aim for a breakout above the EMA 100 line at 13.03 USD.

The LINK/USDT 4-hour chart | Source: TradingViewAt the same time, the MACD indicator has maintained a buy signal since Friday, when the green MACD line( crossed above the red signal line) — a sign that the short term upward trend is still being reinforced.

In a positive scenario, if the blue histogram bars continue to expand above the average line, investors may increase their positions, thereby enhancing the probability of LINK breaking through the important resistance level at the EMA 200 around the 13.56 USD mark.

However, the risk of a correction still exists. In the event that profit-taking pressure increases and overshadows demand, Chainlink's recovery momentum may weaken, pulling the price back to test the EMA 50 line at 12.75 USD. A close below this threshold will increase negative signals, opening up the possibility for LINK to continue to drop to the support area of 12.22 USD — a price level that was last tested on Sunday.

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