Chainlink (LINK) increased by 15% this week despite persistent selling pressure from long term holders.

Chainlink (LINK) recorded an increase of 2.74% in the past 24 hours, following the news that the prestigious asset manager Franklin Templeton is considering adding major altcoins, including Chainlink, to its cryptocurrency index ETF. This move quickly became a positive catalyst for market sentiment.

In addition, optimistic news such as DTCC adding Bitwise's Chainlink ETF to its list of upcoming launches also sparks hope for investors amid the ongoing pressure from the bearish market trend. Although it is not enough to create a clear reversal in the short-term outlook, these signals are helping to strengthen long-term confidence in LINK.

Notably, the 15.25% increase over the past week has triggered a positive short-term sentiment. Although the on-chain indicators at the time of writing still show mixed results, the data indicates that buying pressure in the spot market is gradually gaining dominance.

The dominance of the bulls in the spot market and the profit-taking activities of Hodlers

Source: CryptoQuantSince November 22, the spot taker index has shown that the bulls are gradually gaining the upper hand. This is an indicator that measures the accumulated difference between the buying and selling volumes of taker orders in the spot market over a period of 3 months.

When the CVD index of the spot taker remains in the positive zone and continues to increase, it clearly reflects the dominance of the buying force. Since taker orders are the direct driving force behind price fluctuations, this trend is seen as a notable bullish signal for Chainlink investors.

Source: GlassnodeHowever, on the contrary, the net position change index of LINK holders is still deeply in the negative zone. This indicator reflects the monthly fluctuations of long-term investors. Negative values indicate that holders are still taking profits. This trend has appeared since the first week of October, coinciding with the time LINK entered the correction phase. Although the selling pressure has somewhat weakened, data still shows significant capital outflows from the market.

The contrast between the short-term recovery trend of the price and the persistent selling pressure from the long-term holders is creating a rather tug-of-war situation for LINK.

Source: TradingViewObserving the price chart on the 1-day frame, selling pressure remains evident. Despite the recent recovery, the MFI indicator still struggles to break into the high zone, currently fluctuating around the 35 mark at the time of recording. Although it hasn't fallen into the oversold area, this level still reflects the dominance of the sellers and indicates a prolonged downward momentum from October to now.

The aggregation of technical signals and on-chain data indicates that, although the market is showing some rays of hope for short-term price increases, the supply zone of 16 USD remains a key barrier. Only when this area is conquered and transformed into a support zone can LINK investors have a basis for expecting a more sustainable upward trend in the near future.

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