• LINK struggles to breach $12.38 resistance, facing challenges in recovery.

  • Global In/Out of Money indicator shows significant supply between $11.61 and $13.24.

  • Technical indicators suggest weakening bullish momentum, complicating potential rallies.

Chainlink (LINK) finds itself at a critical juncture as it grapples with persistent resistance at the $12.38 level. Despite showing signs of recovery, the altcoin has yet to fully recoup losses from its late August correction, casting doubt on its potential for sustained growth beyond the $11.64 mark.

The Global In/Out of the Money (GIOM) indicator provides crucial insight into LINK’s current market dynamics. Approximately 106.89 million LINK tokens, valued at over $1.2 billion, were accumulated between $11.61 and $13.24.

This substantial supply zone presents a formidable challenge for Chainlink’s upward trajectory.

Source:  IntoTheBlock

For LINK to overcome this hurdle, it must decisively breach the $12.94 resistance level and transform it into a support base. Such a move would pave the way for a push towards $13.24, potentially turning the aforementioned supply profitable.

However, achieving this feat requires sustained bullish sentiment, a factor currently lacking in the market.

Chainlink paints concerning picture

Chainlink’s macro momentum paints a concerning picture for bulls. The Average Directional Index (ADX), a key indicator of trend strength, has dipped below the critical 25.0 threshold.

This decline signals a major weakening of LINK’s uptrend, potentially hampering its ability to generate the momentum necessary for breaching key resistance levels.

Despite these challenges, LINK has managed a price increase over the past 24 hours, currently trading at $11.60. The immediate focus now shifts to the local resistance at $11.64. A successful breach of this level could open the door for a test of the previously insurmountable $12.38 barrier.

However, current market indicators suggest that even if LINK reaches $12.38, sustaining gains above this level may prove challenging due to waning bullish momentum. The likelihood of a pullback increases as buying strength diminishes, potentially leading to a consolidation phase or retracement.