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Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- LINK’s breakout past the nearly 18-month range fueled a further 60% rally.
- The available evidence pointed to further gains, but FOMO should be avoided.
Chain link [LINK] Bulls have been active in the market and continued to push prices higher over the past week. LINK reached nearly $16 in recent trading hours before falling to $13.59 after volatility emerged across the crypto market in the lower timeframes.
This may not faze the bulls. Buying pressure increased and LINK’s net deposits on exchanges were lower than the seven-day average.
AMBCrypto’s report on LINK’s price action, dated November 3, noted that a retracement to $8.14 or $9.5 before another rally was possible. No such retracement occurred, but instead prices shot past the $11.5 resistance since November 5.
LINK prices are likely to move higher following the Fibonacci levels
Source: LINK/USDT on TradingView
The Fibonacci extension levels (light yellow), plotted based on LINK’s breakout past the range (orange) at $9.5, showed that the levels were still valid. The 61.8% expansion level at $15.91 was close to the local high of $15.99 that LINK registered in recent hours before plummeting to $13.59.
However, the bulls were still in control. The market structure on the three-day chart was bullish and the RSI value of 83 reflected the strong efforts of buyers in recent weeks.
On-Balance Volume climbed higher and had also overcome a resistance level as of November 2022. Therefore, further long-term gains were likely. The Chaikin Money Flow (CMF) also showed high capital inflows into the LINK market.
After $16, the $18,315 level was the next target as the 100% Fib extension level. It also matched a resistance level on the weekly chart at $13.2. Meanwhile, the $11.5 and $12.6 levels could act as support in case of a retracement.
The MVRV reaches a previously visited peak in February 2021
Source: Santiment
A rising MVRV ratio means more holders are making a profit and increases the likelihood of selling pressure from current holders. At the time of writing, the MVRV was 88.92%. On February 10, 2021, it was 89.38% and LINK was trading at $32.
Read Chainlink’s [LINK] Price forecast 2023-24
LINK reached $50 a few months after that, meaning a high MVRV does not guarantee a market top. However, investors should be aware that booking profits on their LINK tokens can be a good idea.
The number of daily active addresses has also increased since October, while dormant circulation did not experience any significant peaks. This meant that there were no waves of rising selling pressure yet. On the other hand, the downward trend in the average coin age since September has been a concern.