LINK appeared poised for a strong bullish breakout following low price volatility in the last two weeks of May. However, the price action confirmed that the long-term bearish resistance line was still active due to a bearish reversal. The resistance line is part of LINK’s wedge pattern which is fast approaching the tight zone.
LINK was down about 43% after peaking at $9.65 on June 9 before the bears took over. This resulted in a retracement after contacting the bearish resistance line. The price appears to have found support at $5.28, which is in the same range as the May low.
The market is not out of the woods yet and the prevailing FUD is suggesting that the downturn may not be over yet. Additional selling pressure could potentially push LINK below the buy wall near the May lows and towards the support line.
Such a result would likely push towards the $4.6 price level. Another possible outcome is a rally back to the bearish support for another retest of a bullish breakout.
Can on-chain stats provide more clarity on LINK’s price action?
LINK’s on-chain volumes have risen significantly since early June. At the same time the supply in the hands of whales metric registered outflows. This suggests that it was a sales volume that was increasing.
Until June 10, however, the market capitalization showed a remarkable increase. The difference between the market cap and the supply of whales suggests that profits were taken that eventually led to the sell-off.
The above observation was also consistent with the net supply at addresses. The addresses with more than 10 million coins held 62.54% of LINK on May 31, but had fallen to 61.77% on June 9.
By June 15, they had fallen to 59.53%. Addresses with between 1 million and 10 million LINK fell from 15.83% on May 31, but rose slightly to 16,375 on June 9. They also increased their holdings to 17.92% by May 15.
Addresses holding between 100,000 and 1 million LINK increased their holdings from 8.33% on May 31 to 8.55% on June 15.
The increase in the number of addresses in the lower categories explains why LINK managed to find support near the May lows. However, it still reveals that whales sell. So LINK cannot find enough buying pressure to support more upside potential. However, the markets are subject to sudden changes and accumulation by whales may lead to a different outcome.
This post Chainlink: what to expect with LINK preparing for a squeeze zone breakout?
was published first on https://ambcrypto.com/chainlink-what-to-expect-with-link-preparing-for-a-breakout-from-a-squeeze-zone/