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October 4, 2022
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Understand why Chainlink is in a position to resist correction this time

Chainlink recently surpassed the $ 32 mark, spiking a new ATH

Chainlink’s price has shown a strong upward trend recently. In fact, in just the past 48 hours, LINK managed to register a new $ 32 ATH, with the cryptocurrency market projecting strong bullish sentiments so far.

However, history suggests that LINK tends to undergo massive price corrections, shortly after sustaining a prolonged bullish trend. So the question remains – post-ATH, where is the LINK price likely to go? While it may be too early to answer that question, some indicators seem to suggest that LINK is likely to maintain a similar price level in the coming weeks.

Source: TradingView

In the past there have been two cases where Chainlink’s price has undergone a substantial reversal in sentiment, right after a bullish run. The first took place in September 2020, after the cryptocurrency reached the coveted $ 20 mark. Following the same, Chainlink’s price dropped about 47 percent.

A similar bearish trend was also started in late November, with LINK seeing a loss of more than 31 percent. Since then, however, LINK has sustained its bullish efforts, which led to massive price discovery and the ATH it hit the day before yesterday.

Taking into account historical price data, it can be argued that LINK is likely to see a trend reversal and a price correction in the coming weeks. However, there seemed to be a possibility that the change in the bearish trend will have to wait a little longer if we follow some metrics.

You Glassnode data registered a steady increase in active addresses and, interestingly, along with that, the data also showed new addresses being formed as the price continued to rise – a sign of new investors entering the market, despite the high price of Chainlink. This, to some extent, reduces LINK’s chance of liquidation and helps it maintain a similar price level.

However, if the price correction occurs, a drop of about 14 percent can be expected, bringing the currency’s price into the $ 25- $ 26 range thanks to the support the currency has accumulated in recent weeks.

Understand why Chainlink is in a position to resist correction this time 22

Source: Santiment

Another interesting metric highlighted by Santiment showed that the most recent ATH was established based on increased token circulation, a greater number of inactive tokens on the move and a sustained high level of activity from unique addresses.

Understand why Chainlink is in a position to resist correction this time 23

Source: Glassnode

In addition, what further strengthens LINK’s upward aspirations is the fact that, according to Glassnode’s network data, LINK’s percentage of smart contract delivery reached an ATH of 55.950%. In light of the significant developments in the LINK ecosystem, together with the metrics mentioned above, it can be argued that LINK has a greater chance of delaying the bearish trend this time, in stark contrast to the aftermath of its previous highs.

Source: AMBCrypto

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