Chainlink: What to expect with LINK preparing for a breakout from a squeeze zone
LINK seemed like it was poised for a strong bullish breakout after low price volatility in the last two weeks of May. However, Its price action confirmed that its long-term descending resistance line was still active through a bearish reversal. The resistance line is part of LINK’s wedge pattern which is rapidly approaching the tight squeeze zone.
LINK fell roughly 43% after peaking at $9.65 on 9 June before the bears took over. This resulted in a retracement after coming into contact with the descending resistance line. The price seems to have found support at $5.28 which is within the same ballpark as its bottom level in May.
Source: TradingView
The market is not out of the woods yet and prevailing FUD suggests that the downturn might not be over. Additional selling pressure can potentially push LINK below the buy wall near May lows and towards the support line.
Such an outcome would likely push towards the $4.6 price level. Another possible outcome is a rally back towards the descending support, for another retest of a bullish breakout.
LINK’s on-chain volumes increased significantly since the start of June. The same time that its supply held by whales metric registered outflows. This suggests that it was selling volume that increased.
However, the market cap registered a notable increase up until 10 June. The divergence between market cap and supply held by whales suggests that there was profit taking which eventually led to the selloff.
Source: Santiment
The above observation was also consistent with the supply by balance on addresses. The addresses holding more than 10 million coins controlled 62.54% of LINK by 31 May but had dropped to 61.77% by 9 June.
They dropped to 59.53% by 15 June. Addresses holding between 1 million
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