Chainlink Approaches Significant Supply Wall

Chainlink has seen a significant increase in bullish momentum, currently leading the cryptocurrency market. Still, multiple indicators suggest that LINK could experience a brief correction if it enters the $10 zone.

Chainlink Approaches Double-Digit Territory

Chainlink has outperformed the top 10 cryptocurrencies by market capitalization, surging more than 6% since the start of Friday’s trading session.

LINK rallied from a low of $8.97 to an intraday high of $9.50, before cooling to $9.21 at press time. As upward pressure continues to mount, the token appears to have more room to ascend. The development of a descending triangle on the daily chart suggests that Chainlink could rise another 11% before its uptrend reaches exhaustion.

The Y-axis of this technical formation projects a $10.60 target for LINK since it overcame the $7.30 resistance level on July 29. Although the rest of the cryptocurrency market has shown signs of weakness, it appears that Chainlink could achieve its upside potential from a technical perspective.

LINK/USD daily chart (Source: TradingView)

Still, IntoTheBlock’s In/Out of the Money Around Price model shows a stiff supply barrier ahead. Roughly 3,300 addresses have previously purchased nearly 26.4 million LINK between $9.82 and $10.12. This significant area of interest could reject the upward price action as underwater investors could attempt to break even on some of their holdings.

Chainlink’s IOMAP (Source: IntoTheBlock)

Although LINK may have the strength to hit double-digit territory, Chainlink is approaching a significant area of resistance. The Tom DeMark (TD) Sequential indicator also has a high probability of presenting a sell signal on LINK’s daily chart. The potential bearish formation could lead to a one to four daily candlesticks correction before the uptrend resumes.

Disclosure: At the time of writing, the author of this piece owned BTC and ETH.

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