Can Chainlink clear the $7.4 resistance level?
Chainlink is a decentralized oracle network for smart contracts
Its native LINK token has surged 13% in the past week
The token is showing strong bullishness, but momentum remains low
Chainlink LINK/USD is ranked the 23rd largest crypto asset with a market capitalization of $3.5 billion. It is considered the most secure and flexible infrastructure in the crypto blockchain space.
According to its website, the platform is a decentralized oracle network. It offers tamper-proof inputs, outputs, and computations to enhance advanced smart contracts on any blockchain. Chainlink also provides passive income opportunities through staking rewards.
Despite the prolonged crypto market correction, LINK is reaping significant gains. In the past 24 hours, its native token, LINK, has surged 4.51%, bringing weekly gains to 13.35%. Similarly, the tokens have pumped 76% in daily trading volumes to $369 million.
The reason behind the positive gains is not specific. However, a recovery around the DeFi segment could have partly contributed. The top DeFi projects, MakerDAO and Lido, have gained 1% and 6% in their total value locked in a week. As a blockchain that enhances the capabilities of smart contracts, Chainlink is strategically positioned.
Its technical outlook shows a bullish trend in the LINK token, but the RSI momentum indicator says otherwise.
LINK shows bullishness amid a weak momentum
Source: TradingView
Currently, LINK is exchanging for $7.15. The token is approaching $7.4 resistance, which is the immediate resistance level, as per the daily chart above. The trend is showing a steady recovery since testing $6 support on August 29.
Furthermore, the trend-following indicator MACD is looking green. It has crossed the signal line from below to above. However, the RSI is at the neutral 50. Chainlink will need to attract more buyers to gain enough momentum to clear the $7.4 resistance level.
Concluding thoughts
The current level does not present a perfect buy entry. Investors should wait until LINK clears the next resistance level. They should also watch for the momentum indicators to turn positive for an opportunity to enter.
