Chainlink is experiencing a reversal in its price trend, supported by on-chain data. After a minor pullback, the cryptocurrency is showing signs of a double-bottom reversal, signaling a potential breakout rally. Traders are now eyeing a target price of $12.49 for Chainlink.
Despite the increased liquidations and high volatility in the DeFi market, Chainlink seems to be preparing for a trend reversal. The current sentiment suggests that the dip to $10.85 could be an opportune time to buy.
In the 4-hour chart, Chainlink’s recovery rally from the triangle pattern breakout has propelled its price to reach a high of $12.49. This represents a significant 47% price jump from its low of $8.47 in early August. However, the $12.49 level poses a crucial resistance point based on Fibonacci retracement levels.
Following the recent pullback from the $12.49 level, Chainlink is consolidating between the 50% and 61.80% levels at $10.85 and $11.50, respectively. However, there are indications of a potential double-bottom reversal forming, which could challenge the newly formed resistance trend line and support further price increase.
On the on-chain side, IntoTheBlock data reveals that a significant percentage of Chainlink’s volume is in the money, with profitable holders holding approximately $6.39 billion worth of LINK tokens. Conversely, a portion of the volume bought at higher prices is currently out of the money, accounting for $4.81 billion. Additionally, there is a small percentage of LINK tokens bought at break-even points.
Furthermore, there has been fluctuation in the number of transactions and their volumes within the Chainlink network. However, despite these fluctuations, there seems to be growing bullish influence over the on-chain indicators.
In terms of price action, Chainlink is showing signs of a potential bullish breakout as it forms a morning star pattern with two consecutive bullish candles, resulting in a 1.50% price jump. If the breakout continues, the uptrend may encounter resistances at the 61.80% and 78.60% levels ($11.50 and $12.49, respectively). Beyond that, the price could reach the previous peak of $13.90 or even the $16.76 resistance level. On the downside, support levels are positioned at $10.23 and $9.52.
With these factors in mind, Chainlink’s future looks promising, and traders are keeping a close eye on whether it will achieve the $12.49 target.