Recent insights from crypto analysts reveal a mixed sentiment surrounding Chainlink despite its commendable price action in the market. As LINK approaches a potential price point of $13, investors should note conflicting on-chain data.
While Bitcoin remains in a consolidation phase around the $34,200 mark, alternative cryptocurrencies, notably Solana (SOL), Cardano (ADA), and Chainlink (LINK), have embarked on their rallies. Among these, Chainlink has stood out with a robust 45% increase in the last 10 days alone.
Ali, a recognized crypto analyst on the X platform, has shed light on LINK’s current momentum. By examining the hourly charts, Ali noticed Chainlink’s breakthrough from an ascending triangle pattern.
#Chainlink appears to have broken out of an ascending triangle of the hourly chart. This bullish formation forecasts a 14% price breakout that could take $LINK toward $13.
— Ali (@ali_charts) October 31, 2023
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This bullish pattern, historically, suggests a potential upswing of roughly 14% in price. Should this projection come to fruition, LINK could soon touch the $13 mark. Chainlink’s ascent to its current price of $11.50 was accompanied by a 100% increase in its 24-hour trading volume, pointing towards strong investor interest. However, this is where Ali’s analysis introduces caution.
While trading volumes have shown promise, on-chain data narrates a different story. According to the chart presented by CryptoQuant, Chainlink recorded a three-month peak of 8,086 Active Addresses on October 23. This achievement was swiftly followed by a leap in its price to $11.50.
Yet, this optimism was short-lived. The subsequent week brought concerning signs as LINK’s Active Addresses dropped by 60%, settling at 3,233 by October 29. The significance of the Daily Active Addresses metric cannot be understated in the crypto industry. It serves as a barometer for gauging the participation and engagement of users on a blockchain.
A declining trend in this metric historically indicates diminishing demand for the associated project, often signaling potential bearish turns. Adding to the concerns, Santiment also observed a marked decrease in establishing new Chainlink network addresses. This divergence between trading volumes and on-chain metrics emphasizes the need for a comprehensive analysis before concluding Chainlink’s future trajectory.
