Chainlink Retests $14: Here’s What Will Happen If Support Holds
22 Noviembre 2023 - 5:00PM
NEWSBTC
Chainlink has registered some drawdown and has recently retested
the $14 level. Here’s what might happen if support holds at this
mark. On-Chain Data Suggests Resistance Is Thin At Higher Chainlink
Levels As pointed out by analyst Ali in a new post on X, Chainlink
is currently in a critical on-chain demand zone. In on-chain
analysis, a price range is defined as major support or resistance
based on the number of investors or addresses that bought their
coins inside the said range. To any holder, their cost basis is
naturally fundamental, as their profit/loss situation can flip
whenever the cryptocurrency retests it. For this reason, an
investor becomes more likely to show a move whenever such a retest
takes place. Related Reading: Has Bitcoin Reached “Euphoria” Yet?
What On-Chain Data Says If the holder had earlier been holding a
loss, but the price has now risen and reached its equilibrium
point, they might lean towards selling. This is because they might
fear their holdings would go into loss again shortly, so exiting at
break-even wouldn’t sound like a bad idea. The opposite can be true
when the retest occurs from above: the investor might be willing to
buy more, thinking that if this same cost basis proved profitable
earlier, it would do so again soon. A single investor making such
buy or sell moves is insignificant for the rest of the market, but
if many investors share the same cost basis, the asset could feel a
sizeable reaction when the price retests the level. Now, here is a
chart that shows how the Chainlink ranges around the current price
look in terms of the density of investors who bought inside them:
Looks like the ranges above are relatively thin with investors at
the moment | Source: @ali_charts on X As displayed in the above
graph, the Chainlink levels from $13.8 to $14.2 host the cost basis
of about 11,470 addresses, which acquired 23.45 million LINK inside
this range. This range is notably thicker than any other range
immediately below or above the asset’s current price. LINK has been
floating around this range recently, meaning it has been retesting
this major support zone. From the chart, it’s apparent that the
ranges above don’t contain that many investors, so in theory, a
move toward the higher levels shouldn’t be too hard for the asset.
Related Reading: Analyst Predicts Chainlink Rally To $20 Based On
This Pattern However, the trouble would be if this support area is
lost and LINK slips under it for an extended duration. This dense
zone will turn into a resistance wall if this happens, making it
hard for the cryptocurrency to recover above it. Ali notes, though,
that if Chainlink can remain above this zone, the price could climb
towards new highs for the year 2023. LINK Price Chainlink had
slipped below this range just earlier, but the asset was quick to
recover above it, implying that it’s still holding up as support.
The asset has seen a pullback recently | Source: LINKUSD on
TradingView Featured image from iStock.com, charts from
TradingView.com, IntoTheBlock.com
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