Chainlink (LINK) Surges: Day Traders Lock in Profits Amidst Market Uncertainty

Chainlink (LINK) has surged by over 10% in the past few hours, pushing its price to £9.05 at the time of writing. This significant gain comes after a fortnight of sideways consolidation, indicating a potential shift in market momentum.

As LINK rallies, data from Santiment, a leading cryptocurrency data intelligence platform, reveals that some day traders are already taking profits, capitalising on the recent price increase.

This profit-taking activity highlights investors’ cautious optimism as LINK’s price gains momentum and encounters technical resistance within the four-hour timeframe.

LINK’s On-Chain Transaction Volume Shows Profit-Taking

LINK’s daily profit-to-loss transaction volume has reached its highest level since 14 July, with the ratio at 5.986. This signifies that there are nearly six transactions in profit for every transaction in loss, indicating that short-term holders are actively taking profits following the recent upward movement. Such a high ratio suggests that investors are capitalising on a significant price increase or a relief rally, locking in gains as the market tests key levels.

[Image: LINK Ratio of Daily On-Chain Transaction Volume in Profit to Loss.]

This profit-taking trend reveals the dynamics prevailing among traders, even as LINK’s price continues to gain momentum in the market. With the token testing local supply around the £9.10 mark, the market sentiment is one of cautious anticipation. Traders are acutely aware of the delicate balance between further gains and potential pullbacks.

Investors will be watching for signs of a sustained breakout or a potential reversal as LINK approaches this threshold. The outcome at this level could set the tone for LINK’s price action in the coming days, making it a critical juncture for traders and investors alike.

Technical Details: LINK Price at a Critical Level

LINK is trading at £9.00 after breaking a local high of £8.60 set on 8 August, confirming an uptrend on the daily timeframe. The price rally paused at £9.10, right at the four-hour (4H) 200 exponential moving average (EMA), highlighting the significance of this technical indicator in lower timeframes.

This indicator acts as a dynamic support or resistance level, often indicating the trend in lower timeframes. For LINK, reclaiming this level is crucial to confirm bullish momentum.

[Image: LINK price testing the 4H 200 EMA]

For LINK bulls to maintain momentum, the next crucial step is to retake the 4H 200 EMA and aim for £10.80. Conversely, if LINK fails to consolidate above this indicator, it could lead to a retest of the previous resistance at £8.60 and potentially a dip to the higher low around £8.00.

Despite some day traders locking in profits, this activity should be viewed as a sign of healthy profit-taking after a modest rally. The current price action reflects a market in consolidation, with traders closely watching for the next move. As LINK hovers near critical levels, the coming days will be pivotal in determining whether the uptrend continues or if a pullback is on the horizon.

[Cover image from Dall-E, Charts from Tradingview]