Chainlink showed a bullish RSI divergence, suggesting potential upward price movement. LINK’s price touched $21.03 and later found support along a rising trendline, shown since late December.
This ascending support coincided with a notable RSI divergence. While prices dipped, the RSI started forming higher lows, signaling weakening downward momentum.
Such divergences often prelude a positive reversal, hinting that Chainlink could rebound from these levels.
Key resistance was seen near $21, which, if surpassed, could lead to testing higher levels around $22.
This setup could attract buying interest, particularly if broader market conditions stabilize, fostering a possible rally.
Additionally, Chainlink price action showed potential complex head-and-shoulders pattern, with the right shoulder forming near $21. The neckline at $20.20 served as a critical support level.
Previous attempts to break the neckline were unsuccessful, leaving the bearish pattern unconfirmed.
Should the price breach and confirm below $20.20, a projected price target of $13–$13.50 could be anticipated.
RSI levels demonstrated declining momentum, aligning with bearish sentiment. However, without confirmation, price movement remained speculative.
A failure to break the neckline could lead to a bounce toward $23 resistance, negating bearish implications temporarily. The neckline’s status held pivotal significance for future price action.
Chainlink Price: Liquidation Heatmap
LINK’s liquidation heatmap also showed significant activity around key price levels, reflecting zones of high liquidity and potential market movement.
The $20.98 level acted as a pivotal point, with numerous liquidation events recorded. A notable concentration of short liquidations appeared just below this level. This indicates a substantial defense point for bulls to prevent further price dips.
Conversely, the buildup of long liquidations above this price suggests resistance points where bears might capitalize.
Should the Chainlink price confirm a breach below $20.98, heightened liquidation risk could propel further downward pressure. This potentially targets lower liquidity zones around $18.72.
Conversely, securing above this level could mitigate immediate sell-off risks, supporting a short-term recovery phase.
This view of liquidation leverage further indicated the market’s sensitivity at these thresholds, hinting at potential volatility as traders respond to these liquidity cues.
Chainlink’s Proof of Reserve
In other news, Paxos, a notable user of Chainlink’s proof of reserve and a distributor for Paypal’s stablecoin, has significantly increased its holdings in LINK, accumulating a record high of approximately 743,000 tokens, valued over $16 Million USD.
This notable accumulation reflects Paxos’s strategic investment and confidence in Chainlink’s technology and potential, particularly in the context of supporting stablecoin operations which require reliable real-time data feeds for asset verification.
The substantial investment by a prominent institutional player like Paxos could signal to other market participants that LINK is a stable and promising component of the crypto ecosystem.
This can potentially lead to a positive impact on the Chainlink price, as increased demand from institutional investors generally contributes to bullish price movements.
Furthermore, the accumulation of such a large amount of LINK tokens reduces the circulating supply, which, in conjunction with increased demand, could further drive up Chainlink’s price.
This strategic accumulation by Paxos might also encourage other institutions to explore or increase their holdings in LINK, anticipating that Chainlink will continue to expand its utility and adoption across financial services, particularly in activities requiring decentralized feed operations.
As Paxos continues to hold a significant amount of LINK, the token’s price stability and potential for appreciation could make it an attractive asset for both short-term traders and long-term investors.
