Chainlink [LINK] has sustained its position as a top cryptocurrency, with its recent UDPI Long assessment indicating that LINK is currently experiencing a phase of minimal risk.
Looking back, instances of downturns in the UDPI have often preceded periods of price stability or growth. Notably, decreases in risk seen in early 2020 and late 2022 were followed by significant rallies. This pattern suggests that lower perceived risk tends to stimulate increased buying activity.
These low-risk points tend to emerge just before notable price surges, indicating that accumulating LINK during periods of low UDPI Long readings might be beneficial.
Despite occasional doubts regarding Chainlink, these trends imply that it is well-positioned for expansion during favorable market cycles.
Historical data reveals that when risk levels decrease, LINK’s value typically goes up, aligning well with the notion that Chainlink could benefit from alt season.
These times of minimal risk are often seen as ideal for investments, as they may precede potential upswings.
LINK’s Consolidation within a Descending Wedge
The LINK chart displays a clear descending wedge pattern across the hourly timeframe, characterized by converging trendlines that enclose price movements.
This technical structure usually indicates the potential for a bullish reversal once the price breaches the upper trendline.
Over the observed period, LINK’s price movements have been tightly confined within this pattern, signaling reduced volatility and possible accumulation phases.
Repeated tests of the resistance line by LINK’s price have progressively narrowed the price range, heightening expectations for a breakout.
Given this pattern and the current low-risk environment, traders might find an opening to initiate long positions or increase LINK holdings.
The chart suggests that a definitive breakout above the upper trendline, coupled with higher trading volumes, could catalyze a new uptrend.
Trading Volume and Sentiment
Analysis of Chainlink’s Volume Profile Visible Range (VPVR) and Cumulative Volume Delta (CVD) provides valuable insights into market dynamics.
The VPVR indicates increased trading activity at different price levels, with a notable peak around $13.00. This spike in trading volume hints at significant interest levels, potentially acting as a pivotal point for future price actions.
The CVD has shown a general uptick this week, indicating higher buying pressure compared to selling pressure. This suggests that traders are accumulating LINK in anticipation of future price rises.
With bullish sentiment from “Smart Money” investors, who typically outperform the broader market, and a bearish sentiment among retail traders, a contrarian opportunity seems to be unfolding.
The divergence in current sentiments, whereby Smart Money is bullish as highlighted by Market Prophit, supports the notion of taking a long position on LINK.
This strategy, proven to be lucrative, especially in the presence of bearish retail sentiment, indicates that a significant portion of the market may be overlooking positive signals identified by informed investors.