- LINK rallied from range lows to range highs in the past two weeks.
- Evidence of LINK accumulation presented a bullish bias.
Chainlink [LINK] has traded within a range over the past ten weeks. Over the past week, LINK rallied 20% from $13.8 to retest the range high of $16.6.
The bulls were unable to force a breakout, their third attempt in six weeks. Yet, the underlying on-chain metrics pointed toward accumulation.
In a recent report, AMBCrypto observed that a move to $20 was likely. The evidence continued to support this claim.
A breakout past $17 is just a matter of time
AMBCrypto analyzed data from CryptoQuant to better understand investor sentiment. We examined LINK’s Exchange Netflow — Binance metric, as it is the largest crypto exchange by volume.
Netflow is the difference between coins flowing into and out of an exchange. A higher inflow is generally a sign of selling pressure.
The 7-day EMA of the netflow showed that the metric trended downward from the 16th of December to the 9th of January.
Source: CryptoQuant
This steady outflow was a sign that buyers were withdrawing LINK from the exchange at press time. In other words, it pointed toward accumulation over the past month.
AMBCrypto also analyzed Chainlink’s Exchange Supply Ratio. This metric is calculated by dividing the exchange reserve by the total supply.
When this metric declines, it is indicative of the supply in exchange wallets dwindling in comparison to the total supply.
Source: CryptoQuant
These charts were strong evidence that LINK tokens had increasingly moved out of exchanges at press time. On the other hand, network activity declined slightly in January.
Active addresses and network growth slow down
AMBCrypto also noted that LINK’s Development Activity rebounded strongly after the festive season ended. This was a positive for long-term investors, who could draw confidence in their choice of holdings.
The metrics have been positive so far, but the Network Growth saw a slight downtrend in January. From the 29th of December, the Daily Active Addresses metric formed a series of lower highs as well.
Source: Santiment
The Network Growth also declined in January. Both metrics saw only a slight fall-off, but it was a sign of possible waning momentum.
It hinted toward the possibility that the user base shrunk over the past three weeks and was a bearish finding. This could keep Chainlink prices trapped within the range for a longer period.
Source: Coinglass
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Moreover, the Funding Rate has risen dramatically since the 19th of January. During this time, prices rose from $14.6 to $16.5. This suggested that the majority of the market leaned bullishly even as LINK retested the range highs.
Combined with the decrease in activity, it was possible that LINK could see a rejection from the $16.6-$17.6 region. The price action of the past 24 hours saw Chainlink recede from $16.61 to trade at $15.53 at press time.