- Chainlink surged over 74% in 3 weeks to test its 6-month high near $18.7 after breaking key EMAs.
- Derivatives data suggests that many traders still favor long positions for the long term.
After a promising rebound from its $10 support, Chainlink (LINK) recently gained over 74% and touched its 6-month high near the $18.7 resistance. In fact, its price action managed to break above key exponential moving averages (EMAs) – signaling extended bullish momentum.
LINK was trading at around $17.87 at the time of writing, experiencing a slight pullback after hitting the resistance level. Will the bulls break through or will the price enter a consolidation phase?
LINK Eyes $18 Resistance
Source: TradingView, LINK/USDT
LINK’s price action over the past few weeks has highlighted a strong uptrend, with the token forming higher highs and higher lows while maintaining its bullish momentum. The recent price rally has taken LINK above its 20-day EMA ($15.64), 50-day EMA ($13.81), and 200-day EMA ($13.05) – A sign of strong buying pressure that remains intact in the market as a whole.
However, when LINK touched the $18.7 resistance level, the price movement was limited to an ascending channel pattern. A break above $18.7 could pave the way for a sustained uptrend towards the next major resistance at $20. On the other hand, failure to close above this resistance could result in a short-term retracement towards the support near $15.
The relative strength index (RSI) stood at 65.95 at press time, indicating bullish advantage but close to overbought territory. If the RSI fails to hold above 70, buying pressure could ease and lead to a short-term correction.
Furthermore, the RSI could experience a near-term reversal due to a bearish divergence with the price action. However, the north-oriented EMAs are expected to continue providing significant support in the coming days.
Derivatives Market Sentiment
Source: Coinglass
LINK’s trading volume fell 17.67% to $760.22 million and open interest decreased slightly by 0.6%. This revealed that traders are cautious as the price approaches a resistance level.
Over the past 24 hours, the long/short ratio across all exchanges was 0.9474, indicating balanced sentiment among traders. However, platforms like Binance and OKX showed a stronger preference for long positions, with ratios of 2.94 and 2.27. This suggests that many traders have been optimistic about LINK’s potential upside. On Binance, top traders also leaned heavily toward long positions, with a ratio of 3.902.
Recent data indicates that the bulls appear to have the upper hand as most liquidations were in short positions, reinforcing the market’s bullish outlook.
Still, keeping an eye on Bitcoin price action and overall market sentiment will be key to assessing LINK’s next direction.
