Chainlink, one of the prominent decentralized blockchain oracle solutions, showed remarkable strength in September, with a notable 35% rally that pushed its price to $8.2. However, as October dawned, the crypto market experienced a sharp correction, leaving many analysts pondering whether the earlier rally was merely part of a “buy the rumor, sell the news” narrative.
Ranked as the 19th largest cryptocurrency, including stablecoins, Chainlink has witnessed a 5.4% decline over the past seven days and a 2.3% drop in the last 24 hours. The increasing trading volume during this dip indicates a surge in selling pressure, and as of Thursday, Chainlink’s price hovered around $7.16 as bulls aimed to establish support at $7, attempting to counter the bearish sentiment.
Can Chainlink’s Price Resume Its Uptrend?
Chainlink’s impressive surge in September led many investors to believe that it might breach the $10 mark. However, it was inevitable that a pullback would occur, especially considering the resistance encountered at $8.2. For the uptrend to continue, LINK needed to gather liquidity by moving through lower support levels.
One of these potential support areas lies around $7. Nonetheless, traders need to exercise caution, as the Moving Average Convergence Divergence (MACD) recently signaled a sell. This sell signal emerged on October 6 when the blue MACD line crossed beneath the red signal line, implying a shift in market sentiment.
Another factor to consider is the 21-day Exponential Moving Average (EMA), marked in red, which is currently acting as resistance, hindering upward movement. Therefore, for bulls to regain full control of Chainlink’s trajectory, the resistance at $7.33 must be overcome.
Should the immediate support at $7 fail to hold, it would indicate that bulls are exploring lower levels of support, potentially targeting the confluence around $6.8. This confluence is formed by the 100-day EMA (blue) and the 200-day EMA (purple), and a successful test of this support could be a pivotal moment for Chainlink’s price action.
Chainlink Whales Joining the Fray
Recent data from the blockchain analytics platform Santiment has revealed a 6% increase in the number of addresses holding between 100,000 and 10 million LINK tokens, in comparison to the figures from September 18. Historically, a surge in whale activity often foreshadows market trends.
The increased participation of large-volume holders might indicate that they are seizing the opportunity to buy the dip, particularly following the price’s recent high of $8.2. With growing interest in LINK, the next upward move could be substantial and potentially push the token beyond the $10 threshold.
Meanwhile, Chainlink finds itself at the center of the tokenization of real-world assets (RWAs). Investors are increasingly confident that the LINK token might be the “safest bet” for those seeking exposure and profits from this emerging trend.
According to K33 analyst David Zimmerman, “If we wish to have exposure to the RWA narrative and avoid being sidelined when it takes off, LINK is the safest bet.” This sentiment reflects the faith that many investors have in Chainlink’s role within the evolving landscape of blockchain and decentralized finance.
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