NAIROBI (CoinChapter.com) — Chainlink (LINK) experienced a significant drop, falling 8.91% to $13.09 on July 4. This decline reduced its market cap to $7.96 billion and accompanied a growth in trading volumes, which rose 101.68%, indicating a strong conviction behind the ongoing selloff.
Will Chainlink (LINK) Break Free from Its Critical Support Level?
The 1-day price chart shows LINK consolidating within a well-defined range, with the upper resistance level near $22 and the lower support around $7.22. The current price hovers close to the support region, highlighted in purple, suggesting a critical decision point for the market.
The 50-day Exponential Moving Average (EMA) stands at $15.02, while the 200-day EMA is at $15.24. LINK’s struggle to break above these EMAs indicates bearish pressure. If the price fails to move above these levels, further downside might be expected.
The Relative Strength Index (RSI) indicates a reading of 38.04, suggesting that LINK is approaching oversold territory, which may lead to a potential price rebound from LINK’s current support levels.
For LINK to regain bullish momentum, it must break above the $15.00 resistance level, which aligns with the 50-day EMA. Successfully closing above this level could attract more buyers, pushing the price towards the next resistance at $22.00.
Conversely, failure to hold the current support level around $13.00 could lead to a retest of the $7.23 support, which has historically attracted strong buying interest. The Moving Average Convergence Divergence (MACD) shows signs of a potential bullish crossover, further supporting a positive outlook.
Whale Accumulation Signals Bullish Trend
Amid the dip, on-chain analytics firm Lookonchain reported that approximately 54 newly created wallets withdrew 2.08 million LINK tokens worth $30.28 million over the past week. This accumulation occurred on Binance. Lookonchain suggested that whales and institutions likely executed this significant accumulation, signaling their interest and confidence as LINK’s price approached resistance levels.
Data from Santiment corroborates this trend, showing a steady increase in the total amount of Chainlink (LINK) holders since early 2024 despite a sharp drop in mid-May. The number of holders quickly recovered and continued to climb, reaching approximately 721,000 by June 4, 2024. Concurrently, transaction volumes have shown significant spikes, suggesting increased trading activity during periods of price movement.
According to data from IntoTheBlock, the market value to realized value (MVRV) ratio, a key metric for assessing market sentiment, shows LINK hovering around the $15 mark. This ratio, coupled with the recent accumulation by whales, supports a bullish outlook for the token.
Analysis of LINK’s global in/out of the money (GIOM) distribution further illustrates market dynamics. Addresses holding LINK at an average price of $2.51 number 42,837, while 86,044 addresses hold LINK at an average price of $5.98. These figures indicate significant holding levels that could influence market movements.
Michaël van de Poppe, a crypto analyst, highlighted that LINK has been following a pattern of six months of downward movement followed by six months of a bull market. He pointed out that LINK is currently in the latter phase, slowly grinding upwards, suggesting positive times ahead for the cryptocurrency.
