Chainlink (LINK) has been struggling to cross above the $13 resistance level for some time. However, on-chain metrics and fundamentals show that there is momentum building beneath the surface.
The $13 price level has turned out to be a strong resistance level, as LINK tested this level several times yet failed to break above it. Since the last week of November, the token has tried to cross this level, but it has failed every single time, except for once when it succeeded.
However, even this successful breakout turned out to be discouraging, as the bear pressure once again pushed the prices below this resistance level.
Although on the surface, LINK looks very bearish, underneath, there are many things taking place. For instance, the above chart shows the net flow of LINK on exchanges, which shows a negative number. This means that investors are stashing their LINK tokens into their wallets, which is shrinking the supply.
Usually, traders transfer their holdings on exchanges to their wallets when they have no intention of selling the token in the near future. When the selling pressure reduces and the on-chain metrics improve, it goes on to say that a momentum shift is approaching fast.
Technical signal suggesting momentum shift
It’s not just the on-chain metrics, which indicate that the momentum is shifting, but the technicals, too, are flashing signals. When considering the chart below, LINK has been making lower lows while the Relative Strength Index (RSI) has been making higher lows.
This is not something normal. Usually, the RSI follows the prices; however, this time they are moving in opposite directions. This means that the bullish momentum is building, and it will be displayed on the price charts in the future. As such, LINK will once again test the $13 level and go past it this time.
