Chainlink motionless between critical support and resistance as whales begin dumping

Chainlink’s uptrend slowed down considerably in the second week of November, bringing the possibility of consolidation into the picture. On the upside, resistance was encountered at $14, adding weight to the bearish outlook. On the other hand, the immediate downside is protected at $12, hence the high probability of ranging price action.

Chainlink must hold critical support to avert potential declines

LINK is changing at $12.5 at the time of writing. A subtle buyer congestion zone slightly below the price ensures that some semblance of stability exists in the market. Trading under the 100 Simple Moving Average (SMA) could trigger massive sell orders, which will generate enough volume to push the price down to the 50 SMA.

The fifth-largest cryptocurrency has also been trading within an ascending parallel channel. The support at the lower boundary is key to the uptrend. Otherwise, if lost, the decentralized oracle token might revisit the primary support at $10. This zone functioned as support earlier in the month and is likely to push LINK upwards and jumpstart the uptrend.

LINK/USD 4-hour chart

According to Santiment, large volume holders of LINK are currently dumping. The uptrend last week was supported by a higher intake of LINK tokens among these investors. Whales holding between 100,000 and 1 million LINK shot up from 239 on October 30 to 247 on November 12. However, these addresses have begun dumping, as illustrated on the chart. If the selling pressure increases, the headwind will force Chainlink towards the primary support at $10.

Chainlink holder distribution chart

According to the hourly chart, LINK/USD could stay in consolidation a while longer. The price action above the confluence formed by the 50 SMA and the 100 SMA might catapult LINK to highs beyond $14.

LINK/USD 1-hour chart

On the flip side, consolidation will come to an end if Chainlink drops below the 200 SMA. The most probable support under this fundamental level is buyer congestion at $10. Here, bulls will have ample time to strategize on the approach to use for recovery heading to $14.