Chainlink (LINK) has surged over 10% in the past few hours, pushing its price to $11.39 at the time of writing, signifying a potential shift in momentum after two weeks of sideways consolidation.
As LINK rallies, data from Santiment, a leading crypto data intelligence platform, reveals that daily traders are already taking profits, capitalizing on the recent price increase. This profit-taking activity underscores the cautious optimism among investors as LINK’s price gains momentum, reaching technical resistance in the 4-hour timeframe.
LINK’s daily profit-to-loss transaction volume has hit its highest level since July 14, with the ratio standing at 5.986. This means nearly six transactions are in profit for every one in loss, signaling that short-term holders are actively locking in gains following the recent momentum. Such a high ratio indicates that investors are capitalizing on a significant price increase or relief rally as the market tests key levels.
This trend reveals the dynamics among traders, even as LINK’s price continues to gain traction in the market. With the token testing local supply around the $11.40 mark, market sentiment is marked by careful anticipation. Traders are acutely aware of the delicate balance between further gains and potential pullbacks.
As LINK approaches this critical threshold, investors will watch closely for signs of a sustained breakout or potential reversal. The outcome at this level could set the tone for LINK’s price action in the coming days, making it a pivotal moment for both traders and investors.
At present, LINK is trading at $11.31 after surpassing a local high of $10.83 set on August 8, confirming an uptrend on the daily timeframe. The price rally has paused at $11.40, precisely at the 4-hour (4H) 200 exponential moving average (EMA), highlighting the significance of this technical indicator in shorter timeframes.
The 4H 200 EMA serves as a dynamic support or resistance level, often indicating trends in lower timeframes. For LINK to confirm bullish momentum, it is crucial to reclaim this level. The next step for LINK bulls would be aiming for $13. Conversely, if LINK fails to consolidate above this indicator, a retest of the previous resistance at $10.83 and potentially a dip to the higher low around $9.90 could be on the horizon.
Despite some day traders locking in profits, this behavior should be considered a sign of healthy profit-taking after a modest rally. The current price action reflects a market in consolidation, with traders closely monitoring for the next move. As LINK hovers near critical levels, the coming days will be key in determining whether the uptrend continues or if a pullback is imminent.
