Chainlink’s LINK cryptocurrency received a lot of hype and attention last week, leading to a strong bull run. Unfortunately, FUD’s return to the market limited its upside potential, instead sparking another sell-off.
Subsequent selling pressure from LINK led to an 18% retracement from last week’s high of $8.14 to this week’s low of $6.51. It rallied 5.21% to its time-to-time price of $7.03, but its current level may be more than meets the eye. LINK’s price action is currently pressing into a tight resistance and support range.
Breaking the wedge
LINK’s wedge pattern can provide some insight into what to expect in the near term. It briefly broke through the resistance line prior to the retracement, indicating strong momentum. The lower range also leads to a similar observation after the bears failed to push all the way to the support line.
The bullish price action over the past 24 hours reflects a slight pivot in the RSI. While this observation creates a bullish bias, it is not necessarily a guarantee of such an outcome. LINK bears can still regain dominance and push for a structured break under the support.
Perhaps the on-chain data from LINK investors will provide more clarity. Here are some of the considerations investors should look at. LINK’s 90-day dormant circulation stat had its last major peak around mid-September.
The same statistic indicates that there has been relatively little activity since then. This means that most LINK tokens privately have not been moved. A sign that long-term buyers are still holding onto their LINK tokens.
The metric observation of dormancy is beneficial for the bulls from a supply perspective. It confirms that the amount of LINK available on exchanges is lower, so an increase in demand can cause a surge. Speaking of supplies, top addresses have accumulated over the past 30 days.
The above statistics collectively confirm that the top address or whales have collected LINK. Despite this, its price action made only a small marginal gain from its current low in 2022.
This could be a sign that most top LINK holders think it is currently in the lower range of the current bear market.
LINK’s daily on-chain transaction stat is perhaps one of the few stats that currently paint a not-so-favorable picture.
Lower profitability of daily on-chain trades may appear bearish. You could interpret it as a result of the bearish price action or a reflection of the FOMO that has prevailed in recent days.
However, investors are likely to double down on accumulation when most investors are in the red. Still, there’s always room for the more potential downside.