• LINK, at press time, was showing signs of a potential breakout, supported by bullish technical indicators
• Exchange reserves dropped, while long liquidations highlighted strong bullish sentiment

Chainlink [LINK]  has been making significant strides lately, through its technological innovations and notable improvements in its overall market performance. After launching CCIP Private Transactions for banks and integrating with Bitcoin, Chainlink is positioning itself as a leader in cross-chain tokenized asset settlements. 

With ANZ’s pilot program and an AI-driven initiative to manage unstructured financial data, LINK has registered a price surge of 4.46% in the last 24 hours. Trading at $11.79 at press time, LINK seemed to be approaching a critical resistance level.

The question now is – Can this momentum push it to new highs?

Is LINK set for a breakout?

LINK’s chart revealed a symmetrical triangle pattern, one that has been tightening since mid-July. At press time, LINK was trading near the top of this triangle, hovering at $11.77. Moreover, the Relative Strength Index (RSI) stood at 54.98, suggesting that LINK has a bullish edge. 

Additionally, the Moving Average Convergence Divergence (MACD) underlined a recent bullish crossover, which could be a sign of upward momentum. Therefore, if LINK breaks out of the triangle, its next target may be the psychological level of $13.

Strong on-chain signals indicate increased usage

On-chain metrics painted a promising picture for Chainlink. Active addresses rose by 1.11% in the last 24 hours, climbing to 176.45k. This can be interpreted as a sign of growing interest and activity within the Chainlink network. 

Additionally, the transaction count hiked by 1.18%, reinforcing the notion that more users are utilizing the platform’s decentralized services. Together, these signals supported the bullish narrative, highlighting greater network engagement.

LINK exchange reserves drop, indicating supply constraints

Interestingly, exchange reserves for LINK have fallen by 0.27% over the last seven days, dropping to 163.97 million tokens. This drop suggested that investors are moving their holdings off exchanges and into private wallets. 

This may be a sign of lower selling pressure, which could further drive the price upwards if demand continues to climb.

Long liquidations add fuel to the bullish fire

Another factor contributing to LINK’s potential rally is the imbalance between long and short liquidations.

Data revealed that $185.22k in long positions were liquidated, compared to $131.73k in shorts. This tilt towards long liquidations underlined traders’ confidence in a bullish move – Accelerating LINK’s price breakout.

Is your portfolio green? Check out the LINK Profit Calculator

Right now, Chainlink appears well-positioned for a breakout with increasing network activity, declining exchange reserves, and bullish market sentiment.

If it successfully breaks above $12, it could quickly target higher resistance levels. However, traders should remain cautious as the resistance at $12 could trigger a pullback before further gains.