Chainlink (LINK) has experienced a notable market activity as it successfully bounces off a local support trendline, reflecting the bullish sentiment among investors. Currently trading above $24, LINK maintains the progress made with a more than 2% gain recorded on Thursday, largely fueled by the recent announcement of a buyback of over 43,000 tokens.
The Chainlink Reserve now boasts a total of 323,116.40 LINK tokens following this buyback. This strategic move underlines the Chainlink team’s confidence in the project, and the reduction in supply is anticipated to bolster demand. The tokens were accumulated through off-chain revenue from corporate partnerships and on-chain revenue generated from various services, illustrating the strong financial foundation of the project.
Supporting the positive market sentiment, derivatives data indicates a steady rise in demand for LINK. According to CoinGlass, bullish bets on LINK surged to 50.18% over the past three days, marking an increase from the previous 48.89% recorded on Wednesday. This shift signals a growing appetite for risk among investors in the cryptocurrency market.
In terms of market metrics, LINK’s Open Interest (OI) stands at approximately $1.70 billion, down from $1.77 billion on Thursday. However, it remains at a healthy level, reflecting a short-term recovery after previously bouncing off a low of $1.50 billion in early September.
Chainlink’s price action shows a robust recovery trend, having rebounded off a key local support trendline identified by connecting lows from June 22 and August 2. Currently, LINK holds above the significant Fibonacci retracement level at $24.35, drawn from the high of $30.94 in December to a low of $10.10 in April. Analysts suggest that a decisive close above this retracement level could pave the way for a rally towards the previous week’s high of $25.64. Further resistance could be encountered around August’s high at $27.87, followed by the December high of $30.94.
Adding to the bullish outlook, the Relative Strength Index (RSI) has shown an upsurge, now reaching 56, indicating increased buying pressure. However, the Moving Average Convergence Divergence (MACD) has reached a level of indecision as it converges with its signal line, suggesting a neutral shift in trend momentum.
On the downside, should LINK fall below the low of $22.75 recorded on Wednesday, it would signal a potential breakdown of the support trendline. In such a scenario, immediate support could be found at the 50-day Exponential Moving Average (EMA) level of $22.44, followed by the 100-day EMA at $20.34.
As the market continues to evolve, Chainlink’s recent developments and supporting data reflect growing optimism among investors, highlighting a pivotal moment for LINK in its market trajectory.
