- LINK gained momentum, with technical indicators pointing to a possible breakout above $13.
- Market sentiment has improved, supported by increasing network activity and declining foreign exchange reserves.
Chain link [LINK] has shown impressive gains in recent days, due to major developments within its ecosystem.
The introduction of staking, the expansion of the data oracle network, and the launch of Secure Mint have all contributed to LINK’s bullish momentum.
At the time of writing, LINK was trading at $11.53, up 4.80% in the last 24 hours. The critical question now is whether this momentum will be enough for LINK to surpass the key resistance level at $13.
Is Chainlink Signaling the Next Bullish Breakout?
LINK price is struggling to sustain a long-term move above $13. Current technical analysis showed that the Bollinger Bands were tightening, indicating that a possible breakout is imminent.
Moreover, the MACD moved towards bullish territory, indicating an upcoming upward move. However, the resistance at $12.82 needs to be broken decisively.
If LINK can reach this level, it will likely trigger a rally above $13.
Source: TradingView
Growing network activity is driving bullish sentiment
Chainlink’s on-chain activity has been steadily increasing. The number of active addresses increased by 1.25% to 178.91K over the past 24 hours, indicating a strong increase in network participation.
Moreover, the number of transactions grew by 1.28%, with 4,05,000 transactions recorded during the same period according to CryptoQuant data.
These rising numbers reflect increasing demand for LINK and suggest the network is experiencing healthy growth, further strengthening the case for a possible outbreak.
Source: CryptoQuant
Foreign exchange reserves decline as selling pressure diminishes
Another positive sign for LINK’s price is the decline in foreign exchange reserves, which fell by 0.26% to 166.21 million LINK in the last 24 hours.
This decline indicates that fewer tokens are being held on the exchanges, reducing selling pressure and creating a favorable environment for price appreciation.
Source: CryptoQuant
Chainlink’s shorts outweigh the longs, but for how long?
Currently, 53.35% of traders have a short position on LINK, while 46.65% have long positions.
However, if LINK manages to break through the $13 resistance, this imbalance could trigger a short squeeze, forcing short sellers to quickly repurchase LINK.
This could lead to a rapid price increase, which could take LINK to an even higher level.
Source: Coinglass
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Chainlink’s recent price surge, combined with improving on-chain metrics and dwindling foreign exchange reserves, points to a possible breakout.
If LINK can overcome the resistance at $12.81, the token could stage a quick rally. However, continued buying momentum and market support will be key in determining whether this breakout will materialize.