In a market where bullish expectations are exploding, Chainlink could be in for a market retrace.
As per the on-chain metrics, the network activity has shown a 27% decline followed by plummeting prices.
Is Chainlink price correction to be followed?
Cryptocurrency markets are all set to grow with enthusiasts
growing bullish. The markets seem to be in the realm of a new major uprising, but, despite that, Chainlink followers might have to wait before the new resurgence is discovered. Many technical, as well as on-chain indicators, are suggesting the fact that LINK is set for a major correction before it tries to touch a new zenith.
A new technical pattern seemed to have emerged in late September when its price action was restricted in an increasing parallel chain on its daily chart. There was a 64% correction as compared to the hitherto token’s all-time high. After the very recent retest of the channel’s upper boundary on Nov 7, ChainLink went back by more than 9%. In the entirety of the technical formation, the token is currently trading around the middle line and that means the token is poised to further reduce towards the lower edge before finding its way back to an increment.
Source: Trading View
The average daily addresses on the network also seem to be plummeting as market participants are now attracted to the current state of affairs. From the past week, there has been a 27% decline with only 2,200 addresses added past week. This could further dampen the spirit as adoption reduces majorly.
Indications from the IOMAP model
In/Out of the Money Around Price (IOMAP) model has indicated that if there is a price correction, its lower boundary could be counted as a rebound zone. The barriers with respect to demand will ensure the fall in the prices are controlled because those who hold the crypto will ensure that their investments are not recorded in the red zone. To ensure that, they may also purchase more tokens so that the downward pressure is curbed.
The IOMAP model also shows that bulls will not be able to refute the short-term bearish perspective. At present Chainlink is at a major resistance barrier as more than 15,000 addresses bought more than 28 million LINK between the price range of $12.5 and $13.2.
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