- LINK was showing signs of a possible breakout at the time of writing, supported by bullish technical indicators
- Foreign exchange reserves fell, while prolonged liquidations highlighted strong bullish sentiment
Chain link [LINK] has made significant progress recently due to technological innovations and notable improvements in overall market performance. Following the launch of CCIP Private Transactions for banks and the integration with Bitcoin, Chainlink is positioning itself as a leader in cross-chain tokenized asset settlements.
With ANZ’s pilot program and an AI-driven initiative to manage unstructured financial data, LINK has registered a 4.46% price increase in the past 24 hours. LINK was trading at $11.79 at the time of writing and appeared to be approaching a critical resistance level.
The question now is: can this momentum push it to new highs?
Is LINK ready for a breakout?
LINK’s chart showed a symmetrical triangle pattern, a pattern that has been tightening since mid-July. At the time of writing, LINK was trading at the top of this triangle, hovering at $11.77. Moreover, the Relative Strength Index (RSI) stood at 54.98, indicating that LINK has a bullish edge.
Additionally, the Moving Average Convergence Divergence (MACD) underlined a recent bullish crossover, which could be a sign of upside momentum. Therefore, if LINK breaks out of the triangle, the next target could be the psychological level of $13.
Source: TradingView
Strong signals in the chain indicate increased use
On-chain metrics painted a promising picture for Chainlink. Active addresses increased by 1.11% in the past 24 hours, to 176.45k. This can be interpreted as a sign of growing interest and activity within the Chainlink network.
Furthermore, the number of transactions increased by 1.18%, reinforcing the idea that more users are taking advantage of the platform’s decentralized services. Together, these signals supported the bullish narrative, highlighting greater network engagement.
Source: CryptoQuant
LINK foreign exchange reserves are falling, indicating supply constraints
Interestingly, currency reserves for LINK have fallen by 0.27% to 163.97 million tokens over the past seven days. This decline suggested that investors are moving their holdings from the stock exchanges to private wallets.
This could be a sign of lower selling pressure, which could push the price up further if demand continues to rise.
Source: CryptoQuant
Long liquidations add fuel to the bullish fire
Another factor contributing to LINK’s potential rally is the imbalance between long and short liquidations.
Data showed that $185.22k of long positions were liquidated, compared to $131.73k of shorts. This tendency towards long liquidations underlined traders’ confidence in a bullish move – accelerating LINK’s price breakout.
Source: Coinglass
Is your portfolio green? View the LINK Profit Calculator
At the moment, Chainlink appears well positioned for a breakout with increasing network activity, dwindling foreign exchange reserves and bullish market sentiment.
If it successfully breaks above $12, it could quickly target higher resistance levels. However, traders should remain cautious as the resistance at $12 could trigger a pullback before further gains can be made.
