Chainlink Development Activity Surges 50% Despite Selling Pressure

Chainlink, a prominent Ethereum-based asset, has been making waves in the cryptocurrency market with its robust development activity. According to recent data, Chainlink has seen a 50% increase in development activity compared to Ethereum over the past 30 days. This surge in activity has been a significant driver for long-term investors, who view it as a positive indicator of the asset's potential for growth.

Despite this encouraging development, Chainlink faces several challenges that could hinder its upward trajectory. One of the primary obstacles is the high supply of profit-taking, which has led to a lack of network-wide accumulation. This situation has created a significant hurdle for bulls attempting to push the price past $16.5. The dormant circulation chart, which tracks the number of unique tokens not moved within the previous 180 days, showed a large spike on April 25. This spike coincided with a drop in the Mean Coin Age (MCA), indicating a flurry of selling activity as LINK approached the $15.5 level. This level marked the highs of a range at that time, and the MCA, which had been trending upward since December, was interrupted in March and again in April. The holders' willingness to sell as Chainlink prices approached key resistance levels reflected a lack of conviction in the market.

Another concerning metric for long-term investors is the percentage of supply in profit. At the time of reporting, 76% of LINK holders were in profit. Previous waves of selling on the MCA in March and April occurred when this figure was at 65% and 56%, respectively. This high percentage of holders in profit suggests that there is a significant amount of selling pressure, which could weigh on the asset's price.

Over the past few days, Chainlink has retested the $15.5 level, previously a resistance, as a support zone, with bulls attempting to push the price higher. However, despite leading in development activity, LINK still faces selling pressure and a lack of market conviction, which remains a concern. The high supply of profit and the lack of network-wide accumulation pose significant obstacles to the bulls' attempts to breach $16.5. While the development activity is a positive sign, the market's current sentiment and the high percentage of holders in profit could hinder Chainlink's upward momentum.