Chainlink kicked off October with a bang as prices surged more than 6.5% at the new monthly candlestick open. Several technical and on-chain metrics now suggest that LINK is about to suffer a significant correction.

After rising to new all-time highs in mid-August, Chainlink entered a significant downturn that has seen its price drop a whopping 64%.

It went from trading at a record high of $20.3 to a low of $7.3. Despite the massive losses incurred, the decentralized oracles token does not seem to be out of the woods yet.

LINK is currently facing a stiff resistance cluster ahead that may have the strength to reject any upward price action. This critical hurdle is represented by the upper boundary of a descending parallel channel that formed as prices were plummeting and the 100-day moving average.

A rejection from this level could result in a steep correction towards the lower boundary of the channel, which is also where the 200-day moving average is hovering at.

When looking at IntoTheBlock’s “In/Out of the Money Around Price” (IOMAP) model, such a bearish thesis holds. Based on this on-chain metric, approximately 3,000 addresses had previously purchased nearly 30 million LINK between $10.6 and $10.9.

This large supply wall might absorb any spike in buying pressure and contain rising prices at bay.

Moreover, Santiment’s holders distribution chart reveals that investors with millions of dollars in Chainlink, colloquially known as “whales,” continue to offload their holdings. Since Sept. 14, the number of addresses holding 100,000 to 10 million LINK plunged by more than 3.5%.

Roughly 11 whales have left the network or redistributed their tokens in such a short period.

The continuous selling pressure by these large investors can translate into further slumping prices when considering they hold between $1 million and $100 million in LINK.

Despite the high probability of a steeper decline, a significant spike demand for the cross-chain data oracles token may jeopardize such an outlook.

If Chainlink can turn the 100-day moving average into support and slice through the supply barrier that sits at $10.75, it could aim for the 50-day moving average.

This resistance level is currently hovering at around $13.

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