Chainlink (LINK) Faces Resistance, Bulls Eye Break Above $18.67 High

After failing to breach the 24-hour high of $17.87, Chainlink’s (LINK) bullish momentum faltered, with the price dipping to a low of $17.12. Despite this minor setback, the cryptocurrency shows potential for a significant rally, fueled by investor optimism and an increasing number of active addresses on the network.

LINK/USD 24-hour price chart (source: CoinMarketCap)

Chainlink’s Price Action and Potential Rally

The price action of Chainlink has been a topic of interest for many investors and traders. Recently, the cryptocurrency attempted to surpass the $17.87 mark but faced resistance, leading to a slight decrease in its value. 

However, the underlying factors, such as the increase in active addresses and the volume of LINK tokens nearing profitability, suggest a brewing momentum for an upward trend. The recent surge in active addresses, reaching a two-month high, indicates a growing interest in Chainlink, which could drive the price higher.

Investor Sentiment and Market Dynamics

Investor sentiment around Chainlink is shifting towards the positive, as evidenced by the substantial increase in network participation. With nearly 38.55 million LINK tokens approaching the threshold of profitability, there’s a palpable sense of anticipation among investors. 

This collective optimism is rooted in the expectation of a price increase, which could lead to significant gains for those holding LINK tokens bought within the $17.49 to $18.73 range. The reluctance of investors to sell their holdings until these tokens become profitable underscores the confidence in Chainlink’s potential for price appreciation.

The technical indicators for Chainlink provide insight into its potential future movements. Currently trading around $17.80, LINK is testing the local support level of $17.85. A bounce off this level could propel the cryptocurrency above the $18.73 resistance, paving the way for further gains. 

LINK/USD 7-day price chart (source: TradingView)

 

However, it’s crucial to note that a failure to reclaim the $17.85 support could lead to a decline towards the $16.95 support floor. This level has been tested multiple times in the past, and breaching it could negate the bullish outlook for Chainlink, potentially leading to a drop to $16.00.

LINK/USD Price Analysis

The Chaikin Money Flow (CMF) trend on the LINKUSD, with a rating of -0.02 and pointing southwards, suggests that selling pressure is currently dominant in the market. This indicates a bearish sentiment among traders, which could result in further downward movement for Chainlink in the short term. 

LINK/USD 24-hour price chart (source: TradingView)

 

If the CMF continues to trend downward and falls below -0.05, it could signal an increase in selling pressure and push the price of Chainlink lower toward the $16.00 support level. 

The rate of change (ROC) also moved in the negative region with a rating of -5.39, which further supports the bearish outlook for Chainlink. The upward trend in the ROC needs to reverse in order to indicate a shift in market sentiment towards a more bullish direction for Chainlink.