2024-11-26 05:00 |
An analyst has explained how the path to a new Chainlink all-time high (ATH) could open up if LINK can break past this resistance block.
Chainlink Could Find Major Resistance At The $20 LevelIn a new post on X, analyst Ali Martinez has discussed how the resistance barriers for LINK are currently looking in terms of the on-chain cost basis distribution.
Below is the chart from the market intelligence platform IntoTheBlock shared by the analyst. It shows the amount of the asset acquired at each price range that Chainlink has visited in its history.
As displayed in the graph, many Chainlink investors purchased their tokens inside the $18.4 to $26.3 range. More specifically, around 100,220 addresses acquired 57.2 million LINK at these price levels.
In on-chain analysis, the potential of any price range to act as support or resistance is measured using the number of coins bought inside it. The reason behind this lies in investor psychology.
Generally, holders consider their cost basis a special level since a retest of it can flip their profit-loss status. As such, they can be more prone to making panic moves when this retest happens.
Investors carrying a loss before the retest may fear that the price would return shortly, so they could be tempted to sell and get their money back.
Similarly, holders with their cost basis retested from above could decide to accumulate more, believing that the level will eventually become profitable again.
Both of these effects aren’t consequential when the cost basis of a few investors gets retested. Still, in the scenario where many addresses have their cost basis in a tight range, the reaction produced from a retest may be big enough to cause visible fluctuations in the asset.
The aforementioned Chainlink price range around the average value of $22 holds the cost basis of many investors, so it’s possible that LINK could find it hard to break through these levels.
As Martinez has pointed out, however, if the cryptocurrency can clear this hurdle, it could potentially have an easy run up to a new ATH since not many investors currently have their acquisition level in the price range after the $22 demand zone.
Regarding the ranges under the current price, there are a couple of hefty ones nearby, like $13 to $15 and $11 to $13. If the asset goes through a correction, these levels could potentially help cushion a fall.
LINK PriceChainlink has witnessed a rally of almost 10% over the last 24 hours, taking its price to the $18.4 mark.
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