- Chainlink soared over 74% in three weeks, testing its six-month high near $18.7 after breaking above the key EMAs
- Derivatives data shows that many traders still lean toward long positions over the long term
After a promising recovery from the $10 support, Chainlink (LINK) recently gained over 74% to hit a six-month high near the $18.7 resistance. In fact, the price action has managed to break above the major exponential moving averages (EMAs) – indicating long-term bullish momentum.
LINK was trading around $17.87 at the time of writing and experienced a slight pullback after reaching the resistance level. Will the bulls break through, or will the price enter a consolidation phase?
LINK sees $18 resistance
Source: TradingView, LINK/USDT
LINK’s price action in recent weeks highlighted a steep uptrend, with the token forming higher highs and higher lows while maintaining its bullish momentum. The recent price rise took LINK above the 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 broader market.
However, when LINK reached the resistance level at $18.7, the price movement was limited to an ascending channel pattern. A break above $18.7 could pave the way for a continued uptrend towards the next major resistance at $20. On the other hand, the inability to close above this resistance could prompt a short-term retracement towards support near $15.
The Relative Strength Index (RSI) stood at 65.95 at the time of writing, indicating a bullish edge but approaching overbought territory. If the RSI fails to stay above 70, buying pressure could ease and lead to a short-term correction.
Also, the RSI could undergo a near-term reversal due to a bearish divergence with the price action. However, the northward EMAs would likely continue to provide strong support in the coming days.
The sentiment on the derivatives market
Source: Coinglass
LINK trading volume fell 17.67% to $760.22 million and Open Interest fell slightly by 0.6%. This showed that traders are being cautious as the price approaches a resistance level.
Over the past 24 hours, the long/short ratio on the stock exchanges stood at 0.9474, indicating balanced sentiment among traders. However, platforms like Binance & OKX showed a stronger preference for long positions, with ratios of 2.94 and 2.27. This suggested that many traders were optimistic about LINK’s potential upside. On Binance, top traders also leaned heavily toward long positions, with a ratio of 3.902.
Recent data indicated that bulls appear to have the upper hand as most of the liquidations involved short positions, further supporting the market’s bullish outlook.
Nevertheless, keeping an eye on Bitcoin’s price movements and broader market sentiment will be crucial in determining LINK’s next course of action.