Chainlink is approaching significant supply wall

Chainlink has seen a significant increase in bullish momentum, and is currently leading the cryptocurrency market. Nevertheless, several indicators suggest that LINK may experience a short correction if it enters the $10 zone.

Chainlink is approaching double digit territory

Chainlink has outperformed the top 10 cryptocurrencies by market cap, rising more than 6% since the start of Friday’s trading session.

LINK rose from a low of $8.97 to an intraday high of $9.50, before cooling to $9.21 at press time. As the upward pressure continues to increase, the token appears to have more room to rise. The development of a descending triangle on the daily chart suggests that Chainlink could rise another 11% before the uptrend reaches exhaustion.

The y-axis of this technical formation projects a $10.60 target for LINK since it overcame the $7.30 resistance level on July 29. Although the rest of the cryptocurrency market has shown signs of weakness, it appears that Chainlink may be achieving its upside potential from a technical perspective.

Still, IntoTheBlock’s In/Out of the Money Around Price model shows a stiff supply barrier going forward. About 3300 addresses have previously bought almost 26.4 million LINK between $9.82 and $10.12. This significant area of ​​interest may negate the price rally as underwater investors may attempt to break even on some of their holdings.

While LINK may have the strength to hit double-digit territory, Chainlink is approaching a significant area of ​​resistance. The Tom DeMark (TD) Sequential indicator is also highly likely to present a sell signal on the LINK daily chart. The potential bearish formation could lead to a correction of one to four daily candlesticks before the uptrend resumes.

Disclosure: At the time of writing, the author of this piece owned BTC and ETH.