What the $2.1 Million Liquidation in Chainlink Means for LINK's Future

November 29, 2023 at 01:26 AM GST 2 mins read News

Chainlink’s significant liquidations at $15 mark a pivotal resistance level, impacting LINK’s price.
Despite price drops, data shows increased Chainlink accumulation, indicating holder confidence.
LINK’s movement suggests potential for breakout or downturn, with key levels at $13.6 and $15.5.

Chainlink (LINK) has recently experienced significant turbulence. Over the past 48 hours, the altcoin faced a substantial increase in long position liquidations, particularly around the $15 mark. This activity, according to Coinglass data, has resulted in over $2.1 million in buyer positions being wiped out, strengthening the resistance level for LINK’s price.

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However, the downturn presents a silver lining. The recent dip in Chainlink’s price is seen as an opportunity for buyers to accumulate LINK at a lower rate. Data from IntoTheBlock suggests that there’s been a consistent negative Netflow over the last two days.

This trend implies that more holders are withdrawing LINK rather than depositing, even amidst a price decline, indicating a strategic phase of accumulation among holders.

Notably, Chainlink is seeing a shift in its long/short ratio, now standing at 1.12. Approximately 54% of futures positions are betting on a price rise, while 47% are holding short positions. This change is gradually strengthening the sentiment towards accumulation.

However, there’s a catch. A sudden swing to profit-taking near $15 could trigger another correction for LINK. Despite experiencing a breakout above its declining trend line, Chainlink couldn’t sustain the upward momentum and fell back below the moving averages.

Yet, the bears couldn’t seize this downturn, as buyers quickly pushed the price up from a low of $13.7. Currently, LINK trades at $14.3, marking a 1.6% increase from yesterday.

As Chainlink navigates within a specific price channel, the critical level to watch is the pattern’s break. A drop below the $13.6 support line might send LINK below the MA200 trend line, hinting at a resurgence of bearish sentiment.

Conversely, an upsurge from the MA lines could signal ongoing positive sentiment, potentially setting LINK on an upward trajectory towards $15.5 and beyond.