- Chainlink’s bullish outlook is likely to materialize based on technical and fundamental support.
- The stubborn resistance at $13 in conjunction with the ascending channel’s middle boundary is delaying the breakout.
Chainlink lost nearly 65% of its value from the peak reached in August. Following the support at $7.2 in September, LINK/USD has rebounded to trade above $13 but has failed to overcome the seller congestion at $14.
Chainlink recovery facing a challenge
The recovery over the last couple of months has been consistent within an ascending parallel. However, it is vital to note that Chainlink price action has not been as drastic as between July and August when LINK achieved a new all-time high at $20.
Meanwhile, LINK is dancing at $12.92 while dealing with the resistance at the channel’s middle boundary. Bulls are eyeing the price action above this level as it would boost Chainlink to the point of breakout (the channel’s upper limit).
LINK/USD daily chart
The stretch past the channel towards $18 will be relatively easy, mainly if massive buyers are triggered as investors rush to take positions. Besides, the least resistance path is upwards now that LINK is trading above the 100-day SMA. The Relative Strength Index is holding above the midline and pointing upward to signal that the bullish grip is becoming stronger.
The network growth metric by Santiment gives credibility to the bullish case, following a recent spike. This on-chain metric measures the number of new addresses joining the platform daily.
It also highlights the token’s adoption over time and suggests the network and the asset are gaining traction. As long as Chainlink’s network growth continues to surge, the token price is likely to rally, as seen on the chart.
Chainlink network growth
The IOMAP model by IntoTheBlock hints at a potential rally if the selling pressure between $12.9 and $13.3 is overcome. Here, about 5,300 addresses previously bought roughly 13.5 million LINK.
On the downside, the model reveals growing support behind the decentralized oracle token. The most robust demand zone runs from $10.9 to $11.3. Here, nearly 10,700 addresses had previously bought approximately 22.2 million LINK.
Chainlink IOMAP chart
On the other hand, sellers might regain control if LINK fails to break above the channel’s middle boundary resistance and correct beneath the 100-day SMA. Massive sell orders may also be triggered if declines extend below the lower boundary of the same channel. If support at $10 does not hold firm, LINK may explore lower levels toward the 200-day SMA.