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  • Chainlink finds refuge within an ascending channel as bulls fight to retake control over the price.
  • The network growth topped out on January 6 but has remained relatively higher above 6,000 addresses per day.

Chainlink, alongside Ethereum, Ripple, Litecoin and Polkadot, is leading the steep altcoin correction. The breakdown occurred in tandem with Bitcoin’s slump from highs above $40,000 toward $30,000. LINK is trading at $14.4 amid the bull’s push to reverse the trend and push the price nearer to $20.

Chainlink must hold this critical support

LINK has managed to hold within the ascending channel and particularly at the middle boundary. Keeping the price above this zone remains crucial to the mission to reverse the trend back to $20.

Meanwhile, the Relative Strength Index has reinforced the bearish narrative following the purge from the overbought area and the sharp descent toward the midline. Closing the day above the channel’s middle boundary (immediate support) would call for stability and perhaps encourage more buyers to join the market, taking advantage of the low prices.

LINK/USD 4-hour chart

LINK/USD 4-hour chart

Santiment’s network growth metric shows that the number of unique addresses joining Chainlink has consistently remained high since the year began. These newly created addresses topped 7,358 on January 6 but have seen a minor retreat to 6,182.

Despite the retreat, the figure is relatively higher than mid-December, where addresses averaged around 2,000. As long as the metric sustains this high figure, Chainlink is likely to remain in the bulls’ hands. Hence, the token’s future price has the potential to grow while the project adoption expands.

Chainlink network growth

Chainlink network growth

On the other hand, Chainlink may resume the downtrend if LINK price slices through the immediate support and the buyer congestion at $40. Near term, support is expected at the 50 Simple Moving Average and the 100 SMA. An extended breakdown may retest the lower boundary of the channel, aided by the 200 SMA.