• Chainlink (LINK) has seen a 27.86% rally since mid-February, breaking past a key resistance level and confirming the bullish momentum.
• Signs of a potential retracement are emerging, indicating that an opportunity for short-sellers may be on the horizon.
• Exchange outflows slowed down and social volume surged to new monthly highs, signaling that a bearish retracement may occur if these levels are tested again.
Chainlink’s Impressive Rally in February
Chainlink (LINK) delivered an impressive performance in the first half of February, with bulls pushing the coin beyond its short-term resistance level and rallying by 27.86%. This broke above the $7.79 resistance level and confirmed the continued bullish momentum from January.
Indicators Pointing To Potential Retracement
Despite this positive performance, signs of a potential retracement have emerged which could present an opportunity for short-sellers. Glassnode data revealed slowing exchange outflows and higher exchange inflows which signaled increasing sell pressure. A surge in social volume to new monthly highs was also followed by an uptick in on-chain volume back to previous monthly highs – both of which previously led to bearish retracements when they were tested at similar levels before now. The realized cap metric was also approaching lower 4-week range levels previously associated with increased sell pressure when combined with mean coin age spikes.
Retest Of Volume Levels Could Lead To Bearish Retracements
It is thus likely that LINK will experience another selloff if these same volume levels are re-tested again; however, it is impossible to predict precisely how far prices will drop or recover until after market movements have actually occurred.
Whales May Play A Key Role In Upcoming Price Action
Whales could play a key role in determining upcoming price action as well; supply distribution data revealed that there was decreased whale activity coinciding with LINK’s rally in February so far, suggesting less buying power among large holders compared to earlier periods of higher prices during January 2021’s bull run.