Chainlink (LINK) has been consolidating within a horizontal channel over the past few weeks, with resistance at $10.78 and support at $10.06.
Currently, the altcoin is trading close to its support level, hovering around $10.14.
Chainlink Trends Sideways, but Opportunity Lies Within
LINK has traded within a horizontal channel since August 6. This channel is formed when an asset’s price moves within a range for some time. The upper line of this channel forms resistance, while the lower line forms support.
This sideways movement happens when there is a relative balance between buying and selling pressures, preventing its price from trending strongly in either direction.
This can be gleaned from LINK’s flat Relative Strength Index (RSI). As of this writing, LINK’s RSI is 40.83 and has remained flat since August 6.
When an asset’s RSI is flat, it indicates market indecision or consolidation, with neither strong buying nor selling momentum. In LINK’s case, sellers are hesitant to offload due to most transactions ending in losses rather than profits.
On-chain data from Santiment shows the daily transaction volume in profit is lower than in loss, with a ratio of 0.76 based on a 30-day moving average. This means that for every transaction resulting in a loss, only 0.76 transactions yield a profit.
However, for LINK buyers looking to trade against the market, the ongoing price consolidation has presented a buying opportunity.
LINK’s market value to realized value (MVRV) ratios assessed over different moving averages have flashed buy signals. At press time, the token’s 30-day and 90-day MVRV ratios
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Author: Abiodun Oladokun
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