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Chainlink (LINK): What Investors Need to Consider Before Closing Trades

Chainlink (LINK) What Investors Need to Consider Before Closing Trades

In the past week, Chainlink (LINK) has experienced a meteoric rise in price due to widespread media coverage and investor excitement. Unfortunately, the return of market fear dampened any potential gains, ushering in yet another bearish move for the alt.

The alternative token LINK dropped from its weekly high of $8.12 to its weekly low of $6.51, a loss of 18%. Chainlink’s price increased by 5.21% to $7.03 at press time, yet there may be more to the price than meets the eye. The price of Chainlink is consolidating between a tight support level and a challenging resistance level.

Attacking the Weak Spot

The wedge formation in Chainlink may be indicative of upcoming developments. The alternative briefly traded above the key resistance level before retreating, demonstrating enormous momentum. Similarly, after LINK bears gave up their advance towards the support level, the lower range displayed similar observations.

During the course of the previous day, bullish price actions caused the Relative Strength Index to briefly flip. A bullish mindset is reflected in such an assessment, but it does not ensure favorable results. A structured break under support is still possible if the chainlink bears regain control.

On-Chain

Perhaps the information about the token that is stored on the blockchain will shed more light for LINK buyers. Let’s take a look at a few things that businesses must verify while engaging with Chainlink. The 90-day dormant circulation index for the asset had its most recent large increase around the middle of September trading sessions.

Using the same indicator, we can see that activity has declined significantly since then. This demonstrates that, in the private market, most LINK coins were immobile. Investors who plan to keep their LINK tokens for a long time are sending a clear message. The supply side dormancy metric reading is still in Chainlink bulls’ favor.

This demonstrates that there has been a continued reduction in the volume of LINK currencies traded on exchanges. Therefore, a surge in demand may trigger a significant increase. In the’supply’ sense, the most popular wallets have amassed during the past month. The above metric proves that whales are LINK’s most avid consumers.

The asset’s price movement, however, has improved slightly from its yearly low. That may indicate that the token’s value is stable near its current level towards the bottom of the bear market. The LINK 24h on-chain transfer indicator is still one of the few indices showing a relatively bleak outlook.

Some may view the 24×7 on-chain transfer as negative because it reduces profits. One possible explanation is that investors are reacting negatively to the recent unfavorable price action as a sign of fear of missing out (FOMO). Yet when most market participants explore the red, investors are prone to replicate. The upside potential for LINK, however, remains untapped.

Royal Seed
Royal Seed is a brand new contributor to Alltechcraft, and his writings focus on cryptocurrency news and platform reviews. We highly suggest keeping up with his most recent writings, since they are both quite insightful and fascinating. (Follow him on [email protected]_nba )