Chainlink Approaches Significant Supply Wall

Chainlink has seen a significant increase in bullish momentum, currently leading the cryptocurrency market. Still, multiple indicators suggest that LINK could experience a brief correction if it enters the $10 zone.

Chainlink Approaches Double-Digit Territory

Chainlink has outperformed the top 10 cryptocurrencies by market capitalization, surging more than 6% since the start of Friday’s trading session.

LINK rallied from a low of $8.97 to an intraday high of $9.50, before cooling to $9.21 at press time. As upward pressure continues to mount, the token appears to have more room to ascend. The development of a descending triangle on the daily chart suggests that Chainlink could rise another 11% before its uptrend reaches exhaustion.

The Y-axis of this technical formation projects a $10.60 target for LINK since it overcame the $7.30 resistance level on July 29. Although the rest of the cryptocurrency market has shown signs of weakness, it appears that Chainlink could achieve its upside potential from a technical perspective.

Still, IntoTheBlock’s In/Out of the Money Around Price model shows a stiff supply barrier ahead. Roughly 3,300 addresses have previously purchased nearly 26.4 million LINK between $9.82 and $10.12. This significant area of interest could reject the upward price action as underwater investors could attempt to break even on some of their holdings.

Although LINK may have the strength to hit double-digit territory, Chainlink is approaching a significant area of resistance. The Tom DeMark (TD) Sequential indicator also has a high probability of presenting a sell signal on LINK’s daily chart. The potential bearish formation could lead to a one to four daily candlesticks correction before the uptrend resumes.

Disclosure: At the time of writing, the author of this piece owned BTC and ETH.