Chainlink: Outflows increase, sell pressure alleviates—Is a bullish breakout imminent?

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Chainlink [LINK] is garnering considerable interest as it approaches a retest of its descending trendline and demand zone, hinting at a possible breakout on the horizon.

At press time, LINK was trading at $19.84, marking a daily drop of 4.39%. Despite the decline, both crowd and smart money sentiment lent bullish, offering hope for a recovery. 

The current price movement suggests that LINK is at a crossroads. After testing the demand zone around $20, the price has remained relatively stable, signaling possible accumulation.

However, the resistance level at $23.92 is a critical barrier that needs to be cleared for bullish momentum to resume. 

A successful breakout could lead to a significant upside toward $32, representing a major shift in market sentiment.

On the other hand, if the price fails to sustain within the demand zone, LINK might experience further downside, testing the patience of its holders.

Therefore, the next few trading sessions will be pivotal in shaping LINK’s trajectory.

Recent on-chain data revealed increasing activity in the LINK ecosystem, providing a positive outlook for its network health.

New addresses have surged by 46.39%, and active addresses have jumped by 74.07% over the past seven days. 

Additionally, zero balance addresses have seen a staggering 140.92% increase, suggesting renewed interest among previously inactive participants. This growing engagement reflected heightened trust in LINK’s utility. 

However, sustained growth in these areas will be essential for maintaining long-term network strength and price stability.

Transaction volume data indicated mixed sentiment among investors. While smaller transactions between $10 and $100 rose by 50.19%, large transactions exceeding $10 million increased by an impressive 66.88%.

This points to confidence from both retail and institutional investors. 

However, mid-sized transactions, particularly in the $1k to $100k range, have seen notable declines. This suggests hesitation among certain investor groups, highlighting the need for clarity in LINK’s price movement.

Therefore, maintaining momentum will be crucial to regaining broader investor confidence.

Exchange netflow data revealed an outflow dominance, increasing by 3.79% in the past 24 hours. This indicated reduced selling pressure, aligning with potential accumulation trends.

Historically, such trends have often preceded bullish price movements. However, sustained outflows will be necessary to confirm this pattern and drive LINK’s price higher.

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Given the technical setup, increasing address activity, and net outflows, LINK is well-positioned for a breakout if it clears the $23.92 resistance.

A rally toward $32 is achievable, but maintaining the demand zone is crucial for sustaining upward momentum. Therefore, LINK appears primed for growth, provided the market supports a bullish breakout.