- LINK’s descending wedge pointed to a bullish breakout, with $23.92 resistance as the critical level
- Market sentiment strengthened as Open Interest rose and exchange reserves continued to decline
Chainlink [LINK] has been grabbing the attention of the market with its steady consolidation and potential for a major breakout. Trading at $20.17 following a 0.62% hike at press time, the cryptocurrency seemed to be showing signs of strength within a descending wedge pattern.
With resistance at $23.92 acting as a critical level, LINK could be on the verge of a significant rally towards $30. Will the market momentum support this bullish trajectory?
What does the price action reveal?
LINK’s price action has remained confined within a descending wedge, characterized by lower highs and lower lows. However, this structure is commonly associated with bullish breakouts, especially as prices approach the apex of the wedge.
Consequently, a breakout above the $23.92 resistance could trigger a surge towards $30 – A level that may attract significant interest.
On the downside, a failure to break above resistance could lead to further consolidation, delaying the bullish scenario. Therefore, the coming days will be crucial in determining LINK’s next direction.
Source: TradingView
On-chain activity strengthens optimism
Chainlink’s on-chain metrics also supported a favorable outlook. Active addresses have grown by 0.86% in the last 24 hours, signaling greater user engagement on the network. Additionally, transaction counts have risen by 0.88% – A sign of greater activity and demand.
These metrics, together, underscored the growing interest in Chainlink, which is essential for sustaining a potential rally.
Source: CryptoQuant
Moreover, the exchange reserves for LINK declined by 0.11% too, indicating reduced selling pressure as fewer tokens seemed to be held on exchanges.
Consequently, this could create a favorable supply-demand dynamic, supporting price hikes on the charts. Worth noting, however, that consistent growth in these metrics will be key for a sustained bullish run.
Source: CryptoQuant
Market sentiment and liquidations favor a bullish outlook
Finally, the market sentiment for LINK appeared increasingly optimistic at press time.
Open interest surged by 5.42%, reaching $724.59 million – A sign of greater participation and confidence among traders. Furthermore, liquidation data revealed higher volumes for shorts compared to longs, suggesting that traders have been leaning towards a bullish bias.
Source: Coinglass
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Chainlink seems to be positioned for a breakout with its bullish wedge pattern, growing on-chain activity, and strong market sentiment.
The key lies in breaking the $23.92 resistance, which could unlock a rally to $30 or beyond. Therefore, all signs point to LINK being ready for a significant upward move in the near future.
