Following a strong recovery from the $10 support level, Chainlink (LINK) has recently seen a substantial increase of more than 74% and reached a six-month high near the $18.7 resistance mark. Notably, its price movement has successfully surpassed crucial exponential moving averages (EMAs), suggesting a prolonged bullish trend.
At the time of this writing, LINK was trading around $17.87, undergoing a minor pullback post reaching the resistance level. The pressing question remains: will the bulls manage to push through, or will the price consolidate in the near term?
LINK Aims for the $18 Threshold
The recent price action of LINK has displayed a pronounced uptrend in the past few weeks, characterized by higher highs and higher lows, thereby sustaining its bullish momentum. The recent surge propelled LINK above its 20-day EMA ($15.64), 50-day EMA ($13.81), and 200-day EMA ($13.05), showcasing robust buying pressure prevailing in the broader market.
Despite this momentum, as LINK approached the $18.7 resistance, its movement got confined within an ascending channel pattern. A breakout above $18.7 could potentially set the stage for a sustained upward trend towards the subsequent significant resistance level at $20. Conversely, a failure to conclusively close above this barrier might trigger a short-term retracement towards the support close to $15.
With the Relative Strength Index (RSI) standing at 65.95 currently, a bullish sentiment is evident, albeit nearing the overbought zone. If the RSI fails to maintain levels above 70, the buying pressure might alleviate, leading to a temporary correction.
Additionally, a bearish divergence between the price action and the RSI indicates a potential near-term reversal. Nonetheless, the upward-trending EMAs are likely to offer substantial support in the forthcoming days.
Sentiment in the Derivatives Market
The trading volume for LINK witnessed a 17.67% decline to $760.22 million, while the Open Interest saw a minor 0.6% decrease, indicating cautiousness among traders as the price nears a critical resistance level.
Within the last 24 hours, the long/short ratio on various exchanges stood at 0.9474, reflecting a balanced sentiment among traders. However, platforms such as Binance and OKX exhibited a stronger inclination towards long positions, with ratios of 2.94 and 2.27, respectively, indicating optimism regarding LINK’s potential upwards movement. Notably, on Binance, leading traders significantly favored long positions, with a ratio of 3.902.
Recent data suggests that bullish sentiment prevails, given that most liquidations involved short positions, further reinforcing the positive market outlook.
Nonetheless, closely monitoring Bitcoin’s price action and general market sentiment will be imperative in determining LINK’s forthcoming trajectory.