Chainlink (LINK) has experienced a significant rally over the past two weeks, with its price rising by more than 32% and approaching the $8 mark. However, there are signs that a correction could be on the horizon before further gains are possible.
Here are some key points to consider regarding Chainlink’s price and market dynamics:
- Recent Performance: Chainlink’s price is currently at $7.6, reflecting a strong uptrend in the past two weeks. The cryptocurrency breached the $7.4 resistance level, and it’s essential for it to hold this level as support to sustain its rise.
- RSI Indicator: The Relative Strength Index (RSI) is nearing the overbought zone (above 70.0), indicating that the market may be overheated. Typically, when RSI enters this zone, corrections or sideways movements can follow as the market cools down.
- Price Targets: If a correction occurs, Chainlink might fall back to around $6.9. However, if the rally continues, the next targets for LINK are $8 and $8.3. Breaking the $8.3 level could invalidate the bearish thesis and pave the way for a rise to 2023 highs of $8.5.
- Supply on Exchanges: The supply of LINK held on exchanges has decreased by more than 9 million LINK tokens (approximately $63 million at the current price). This suggests that investors may have moved their holdings to cold wallets or accumulated more LINK, reducing selling pressure during corrections.
- Active Addresses: The number of active addresses on the Chainlink network has reached a two-month high, surpassing 3.5k. This indicates a higher level of investor interest and can be a positive sign for sustaining the rally.
In summary, while Chainlink has seen a strong rally, there are indications that a correction may be imminent due to overbought conditions. However, the positive factors, such as reduced supply on exchanges and increased active addresses, suggest that LINK may be able to withstand a significant decline and potentially continue its upward trajectory in the future.