LINK buyers start accumulation, but resistance level stalls efforts

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

• The daily market structure favored the bulls, but only slightly.
• A drop below $7.07 could quickly take LINK to the $6.8 support.

Chainlink [LINK] noted increases in Key Performance Indicators, although LINK has seen little price gains after the rally in early 2023. On the charts, LINK faced some serious obstacles from the sellers in the $7.5 zone.

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However, investors can remain in good cheer. An increase in Transaction Value Secured (TVS) and more price feed transactions captured translated came alongside a rising number of active developers and code commits, and Chainlink reported a substantial uptick in earnings. Will LINK reflect this positive outlook soon?

LINK is unable to break out past $7.6 but it could just be a matter of time

Source: LINK/USDT on TradingView

Over the past month, Chainlink has traded within the $6.85 and $7.6 levels of support and resistance. This indicated range-bound price action on lower timeframes. An analysis of the one-day chart showed that the past month’s range came after a period of significant volatility in late February and early March.

The market structure can be interpreted in two ways. The more aggressive approach indicated that Chainlink has a bullish bias on the daily timeframe after breaking out past the $7 level in March. However, bulls must be cautious. The reaction from the imbalance at $7.1 saw LINK bounce to $7.6 on 5 April.

How much are 1,10,100 LINKs worth today?

Since then, Chainlink bears have clawed back those gains, which suggested that sellers were likely to force prices beneath the $7 mark soon. The RSI was at 48 and showed neutral momentum.

The uptrend on the OBV in recent months showed buyers were much stronger, but that does not rule out the possibility of a drop toward $6.5 or even the lows at $5.5.

Total weighted sentiment in negative territory as short-term holders continue to sell

Source: Santiment

The 90-day dormant circulation has been relatively flat over the past three weeks, showing a lack of huge token transfers that could precede a large wave of selling. However, the 30-day MVRV ratio has been in decline since late April.

The sentiment has also been negative since mid-March. Despite the accumulation shown on the OBV, it was likely that Chainlink could see its token face losses in the market in the coming weeks.