Recent buying activity and a bullish long/short ratio underscore positive market sentiment for Chainlink.
The altcoin sector is undergoing a noteworthy rally despite the downturn in the cryptocurrency market caused by Bitcoin’s recent rejection of around $49,000 and a significant sell-off that reduced its price to approximately $41,500.
Chainlink, specifically, has distinguished itself by achieving substantial gains over the last few hours and effectively surpassing critical resistance levels. Amid persistent selling pressure at its resistance levels and a steep decline in market dominance, Bitcoin is encountering challenges that hinder its progress.
In light of this, the near-term price prediction for Chainlink is becoming more optimistic, supported by a progressively intense support level. Chainlink’s LINK token has experienced an exceptional recovery after a significant decline, during which it briefly dipped below the critical $13 support level earlier in the month.
Chainlink Establishes a Durable Accumulation Zone
This decline was primarily attributable to Bitcoin’s decline after the US Securities and Exchange Commission’s (SEC) approval of a spot Bitcoin ETF.
Recent data suggests that LINK is undergoing a “moderate decoupling” from alternative cryptocurrencies, as indicated by the four-year low exchange ratio. A decline in the exchange ratio generally means a reduced supply of LINK tokens available for trading on exchanges.
This decrease in supply may result in a reduction in selling pressure. When fewer tokens are sold, sell orders are less likely to cause the price to decrease.
A diminished exchange ratio frequently indicates that a greater proportion of investors are retaining their LINK tokens instead of selling them on exchanges. This holding pattern suggests that investors are optimistic about the future price of LINK due to their belief in its long-term value.
IntoTheBlock data indicates that Chainlink has recently created a significant area of high demand. The region, encompassing $14.8 to $15.2, has emerged as a pivotal space for investors to consider investing.
An asset is considered in a demand zone when many prospective purchasers have indicated interest in acquiring it. Within the price range of $14.8 to $15.2, an astounding 85.13 million LINK tokens have been received by 17,650 addresses, which is a particularly noteworthy figure for Chainlink.
This significant accumulation signifies a high degree of investor confidence in Chainlink at the current price level. This implies that this region may serve as a resilient support in the face of market volatility.
Coinglass reports that the LINK price experienced a short liquidation of more than $1.1 million due to the price declining in opposition to sellers’ wagers. The NVT ratio exhibits a negative correlation with market value development, suggesting that transaction volumes are surpassing network value.
This indicates that the network may be undervalued and has the potential for further expansion. The price of LINK transcended the descending channel pattern and surged substantially to $15. In contrast, the extended wick of the 4-hour candlestick indicated that profits were realized at higher price levels.
The current price of LINK is $15.3, an increase of more than 0.6% compared to yesterday’s price.
At present, the price is encountering selling pressure from bears as it strives to descend toward the breakout point, which is expected to be a level where buyers become active. Although the recent negative divergence of the RSI suggests that bulls are marginally in the lead, the upward trend of moving averages indicates otherwise.
If the price recovers from the breakout point near the EMA20 trend line, purchasers might endeavor to propel the LINK/USDT pair above $17.1. This price level may pose a significant barrier, but if surmounted, the pair’s value could surpass $20.
Presently, the bears aim to direct the price below the support line to propel it into a zone of dread. Significant liquidations could occur if the price of LINK falls below the EMA20 trend line; this could initiate a rally toward $11.
A further price decline, which would cross below the SMA lines, might indicate the conclusion of the uptrend. Such a scenario could result in the pair falling to $8.
There has been a notable surge in buying activity for LINK in recent hours, as evidenced by the long/short ratio surpassing 1. Currently, this ratio is 1.1487, which signifies an increasing bullish momentum on the LINK price, as approximately 54% of positions are long.