Chainlink price delays its 30% upswing as bulls hit a minor blockade

Chainlink price shows signs of exhaustion and is likely to retrace to the immediate support levels. This downswing will allow buyers to recuperate before the next leg-up.

Chainlink price scrambles for momentum

Chainlink price set up a V-shaped valley known as “Adam” followed by a rounded bottom referred to as “Eve” between February 22 and March 22. The Adam and Eve formation is a bottom reversal pattern and forecasts a 28% upswing, determined by measuring the depth of the valley. 

Adding this distance to the breakout point at $15.69 reveals a target of $20.17. So far, LINK has rallied 10% but is currently facing some profit-taking, leading to a pullback. This retracement is likely to continue to a stable support level at $15.69 before a new leg-up emerges.

The resulting rally will propel Chainlink price to hit its target at $20.17.

LINK/USDT 4-hour chart

Suporting this outlook for Chainlink price is IntoTheBlock’s Global In/Out of the Money (GIOM) model. This index shows that roughly 26,000 addresses that purchased nearly 43.52 million LINK tokens at $18.39  are blocking the move higher. 

Interestingly, the immediate support cluster purchased roughly 27 million LINK tokens at an average price of $15.60. Since this level coincides with the one mentioned from a technical perspective, there is a good chance the buyers will make a comeback here.

LINK GIOM.

Moreover, the Market Value to Realized Value (MVRV) model hovering at 13.5% also indicates that a downtrend is likely. This on-chain metric is used to determine the average profit/loss of investors that purchased LINK over the past month.

The 13.5% value suggests that a large chunk of the investors are in profit and are likely to trigger a sell-off if they decide to realize their gains. Additionally, the past four months have seen LINK price retrace after the 30-day MVRV hit roughly 13% to 15%, making the argument of a retracement more compelling.

LINK 30-day MVRV 

While things are looking up for Chainlink price, Bitcoin price and its directional bias have a much larger influence on altcoins like LINK due to the inherent correlation. Therefore, a flash crash in BTC could turn the optimistic outlook of the oracle token sour.

A four-hour candlestick close below $14.36 will invalidate the bullish thesis for Chainlink price and open the path for a further drop to stable support level at $13.60. Here, sidelined buyers can step in and trigger another leg-up.