Chainlink Price Shows Signs of Recovery as Bears Lose Steam

Chainlink (LINK) has been one of the top blockchains used for tokenization and borderless money transfers. However, its price has fallen about 4% in the past 24 hours, trading below the 200-day MA.

Sellers seem to be losing steam as LINK's price broke below an ascending trend channel in late May. The altcoin's price touched February's low of $7.265 but faced a small rejection. The rebound fueled the price past $8, but it has since retraced to this support level and appears to be holding.

This is the third touch of the $7.20 support, and from the look of things, sellers are losing momentum. The momentum indicator is declining and has flipped negative. On a smaller timeframe, four-hour candles are consolidating around $7.280 with MACD bars becoming faint, indicating that sellers are getting exhausted.

Moreover, aggregate liquidations have greatly reduced, indicating that volatility has also reduced, which often precedes expansion. In fact, over 1 million LINK in leveraged long orders were liquidated on June 25 on Binance's perps market, but upon forming the potential bottom at the $7.20 zone, only 120K LINK have been wiped out.

On-chain metrics are starting to align with a potential bullish reversal. Chainlink Spot ETFs turned positive again after recording their first daily outflow of $490K on June 22nd. This was after $138K flowed into the ETFs the next day, relieving bulls.

MOREOVER, LINK demand is high, with the reserve hitting a new peak. In the month of June, the Chainlink Reserve accumulated 593,088 LINK for over $4.60 million. The total holding stands at 4,504,167 LINK, helping create a supply crunch.