Chainlink: Traders bet big on LINK’s rally, despite major RISKS – Why?

Key Takeaways

• Chainlink’s bullish structure faces a key test at $17.50. Spot market dominance and rising Open Interest support the rally, while on-chain metrics like MVRV and NVT signal risk of overheated conditions. Caution remains near resistance.

Chainlink [LINK] extended its uptrend, forming a clear bullish structure as it climbs toward a critical resistance at $17.39. 

After reclaiming the mid-range at $15.90, LINK formed higher lows and highs, showing consistent buyer strength.

At press time, LINK traded at $16.59, closing in on a level that has capped past rallies.

While the price tested this resistance before, that rally failed. The question now: Will this retest spark a breakout or another drop?

Source: TradingView

Can sustained spot demand drive LINK above its resistance wall?

Taker Buy Volume Dominance continues to favor bulls, as shown by the positive Spot Taker CVD over a 90-day window. 

Naturally, this suggests that aggressive buyers continue to outpace sellers in LINK’s spot markets—a trend that often supports continuation rallies.

However, this metric alone won’t guarantee a breakout. Without a spike in exchange-wide activity, momentum may stall.

Still, market taker dominance signals firm demand behind LINK’s recovery.

Source: CryptoQuant

Do THESE ratios suggest overheated conditions?

The MVRV Ratio climbed to 37.87%, at press time, placing most holders in profit territory. Historically, such levels have triggered localized tops as profit-taking kicks in.

Additionally, the NVT ratio has seen repeated spikes, which typically signal a disconnect between price and actual network activity. 

While rising prices can reflect optimism, surging NVT suggests price may be outpacing on-chain utility. 

Therefore, although bullish sentiment remains high, LINK might be entering a speculative zone where cautious traders should monitor for potential reversals.

Source: Santiment

What does the flip in funding say about market sentiment?

After weeks in the red, Funding Rates flipped positive, as of writing, reflecting a growing preference for long positions on derivatives platforms.

Naturally, positive Funding means traders are willing to pay a premium to stay long. It also suggests improved trader confidence.

But that confidence comes with risk. If price stalls, those same longs could face liquidation pressure.

Source: Santiment

Is rising Open Interest fueling momentum or raising volatility risks?

At the time of writing, Open Interest (OI) jumped 8.47% in the last 24 hours to $843.05 million, showing strong participation from derivatives traders. This rise indicates a growing speculative appetite and aligns with the ongoing price surge. 

However, elevated OI can also signal potential volatility, especially if over-leveraged positions get liquidated. 

The Binance Heatmap revealed clustered liquidations just below the $17 zone, suggesting that a breakout or rejection could trigger rapid price moves.

Therefore, while momentum remains bullish, caution is advised near resistance.

Source: CoinGlass

Can LINK break free, or will the range trap persist?

Chainlink is showing renewed strength as bulls push toward a key resistance level near $17.50. Spot demand, funding, and OI all support a bullish outlook. 

However, on-chain metrics and clustered liquidations suggest that a rejection remains possible. 

Whether LINK flips this range into support or faces another rejection will define its short-term trend trajectory.