Chainlink's 40% weekly rally might be a 'bull trap' for #LINK price

LINK's escalating prices coupled with dwindling momentum suggest a divergence, signaling a potential fatigue in the prevailing bullish sentiment within the market.

The price of Chainlink

LINK “tickers down”

$18.34

has surged by approximately 40% over the past week to hit $19.75, its highest level in two years. At least three catalysts have spurred investor confidence and catalyzed this buying behavior.

However, the price rise does not accompany strong momentum, increasing bull trap risks. Let's look closer at these factors.

Why is LINK price rising?

First, there has been a significant activation of previously dormant wallets, leading to the highest recorded spike in the "Age Consumed" metric. Santiment argues that the sudden deployment of old LINK tokens into circulation has contributed to the price jump.

For instance, the Chainlink supply held by entities holding more than 10,000 LINK tokens has rebounded after the dormant wallet news, suggesting that rich traders are accumulating.

In addition, 47 fresh wallets have withdrawn over 2.23 million LINK worth $42.38M from Binance since Feb. 5, according to data resource Lookonchain. This indicates a growing holding behavior among traders amid the price gains.

Nonetheless, upon closer examination of LINK's weekly chart, a bearish divergence is becoming increasingly evident, hinting at a potential trend reversal . #LINKUSD #ANALYSIS #TrendingTopic