Chainlink’s 74% increase – Assessing what will happen to LINK’s price development

• Chainlink rose over 74% in 3 weeks and tested its 6-month high at $18.7 after breaking key EMAs
• Derivatives data suggests that many traders are still leaning towards long positions in the long term

After a promising rebound from the $10 support, Chainlink (LINK) recently gained over 74% and reached its 6-month high near the resistance at $18.7. In fact, its price action has managed to break through key exponential moving averages (EMAs) – a sign of continued bullish momentum.

At the time of writing, LINK was trading at around $17.87 and experienced a slight decline after hitting the resistance level. Will the bulls make the breakthrough or will the price enter a consolidation phase?

LINK sees resistance at $18

Source: TradingView, LINK/USDT

LINK’s price action over the past few weeks has highlighted a steep 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 strength Buying pressure continuing in the broader market.

However, as LINK touched the $18.7 resistance level, the price action was confined 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 support near $15.

The Relative Strength Index (RSI) was at 65.95 at press time, indicating an uptrend 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 reverse in the short term due to a bearish divergence with the price action. However, the north-facing EMAs are likely to continue to provide strong support in the coming days.

Sentiment on the derivatives market

Source: Coinglass

LINK trading volume fell by 17.67% to $760.22 million and open interest fell slightly by 0.6%. This showed that traders are cautious as the price approaches a resistance level.

In the last 24 hours, the long/short ratio on exchanges was 0.9474, indicating balanced sentiment among traders. However, platforms such as Binance and OKX showed a stronger preference for long positions with ratios of 2.94 and 2.27. This suggests that many traders were optimistic about LINK’s possible rise. On Binance, top traders also leaned heavily towards long positions, with a ratio of 3.902.

Recent data suggests that bulls appear to have the upper hand as most liquidations involved short positions, further supporting the market’s bullish outlook.

Nonetheless, keeping an eye on Bitcoin’s price action and overall market sentiment will be crucial to assess LINK’s next price move.