Chainlink (LINK) is at a critical juncture, with its price testing a key demand zone around $20. Despite a recent 4.39% drop to $19.84, the sentiment surrounding LINK remains positive, buoyed by increasing activity from both retail and institutional investors. The rising address activity and decreasing sell pressure suggest that Chainlink may be on the cusp of a breakout.

Chainlink: Outflows rise, sell pressure eases—Is a bullish breakout here?https://t.co/9WUYHFVkf5
— John Morgan (@johnmorganFL) January 9, 2025

The Demand Zone: A Pivotal Level for LINK’s Future Price Action

Chainlink’s current price action signals a decisive moment for the altcoin. The price has recently tested the demand zone at $20, showing signs of stability and potential accumulation. However, LINK faces a significant hurdle at the $23.92 resistance level. If it can break through this price point, a bullish rally could unfold, propelling LINK toward $32. A successful breakout would signify a positive shift in market sentiment, but failure to hold the demand zone may lead to further downside in the near term.

On-Chain Data Reveals Signs of a Breakout

Recent on-chain data paints a promising picture for LINK. New address creation has surged by 46.39%, and active addresses have increased by 74.07% over the past week, pointing to growing interest in Chainlink’s utility. Additionally, the number of previously inactive addresses spiked by 140.92%, suggesting a resurgence in activity from dormant traders.

Transaction volume trends reveal a mixed sentiment, with small transactions between $10 and $100 on the rise, while mid-sized ones have declined. However, large transactions have surged by 66.88%, reflecting confidence from both retail and institutional investors. This combination of buying pressure could ignite a price rally, with LINK potentially clearing resistance levels.

Reduced Selling Pressure Supports a Bullish Outlook

Chainlink’s exchange netflows also indicate a shift in sentiment. Outflows have increased by 3.79%, signaling reduced selling pressure, a trend that often precedes bullish price movements. If this continues, LINK could break through resistance levels and surge toward $32 in the coming weeks.

Also Read: Ripple Joins Forces with Chainlink to Boost RLUSD Stablecoin in DeFi Ecosystems

The next few days will be pivotal for LINK, with traders closely watching whether it can maintain its position or face additional challenges.

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.