Chainlink Faces Critical Test at $17.50 as Bullish Momentum Meets Resistance

Chainlink’s bullish structure is currently facing a critical test at $17.50. The rally is supported by spot market dominance and rising Open Interest, but on-chain metrics such as MVRV and NVT indicate potential overheated conditions, prompting caution near resistance levels.

Chainlink [LINK] has extended its uptrend, forming a clear bullish structure as it approaches a critical resistance at $17.39. After reclaiming the mid-range at $15.90, LINK has formed higher lows and highs, demonstrating consistent buyer strength. At the time of writing, LINK was trading at $16.59, nearing a level that has previously capped rallies.

While the price has tested this resistance before, the previous rally failed. The current retest raises the question of whether it will spark a breakout or another drop. Sustained spot demand could drive LINK above its resistance wall, as indicated by the positive Spot Taker CVD over a 90-day window. This suggests that aggressive buyers continue to outpace sellers in LINK’s spot markets, a trend that often supports continuation rallies. However, without a spike in exchange-wide activity, momentum may stall. Market taker dominance signals firm demand behind LINK’s recovery.

The MVRV Ratio has climbed to 37.87%, placing most holders in profit territory. Historically, such levels have triggered localized tops as profit-taking kicks in. Additionally, the NVT ratio has seen repeated spikes, which typically signal a disconnect between price and actual network activity. While rising prices can reflect optimism, surging NVT suggests that price may be outpacing on-chain utility. Therefore, although bullish sentiment remains high, LINK might be entering a speculative zone where cautious traders should monitor for potential reversals.

After weeks in the red, Funding Rates have flipped positive, reflecting a growing preference for long positions on derivatives platforms. Positive Funding means traders are willing to pay a premium to stay long, suggesting improved trader confidence. However, this confidence comes with risk, as a price stall could lead to liquidation pressure for those same longs.

Open Interest (OI) has jumped 8.47% in the last 24 hours to $843.05 million, showing strong participation from derivatives traders. This rise indicates a growing speculative appetite and aligns with the ongoing price surge. However, elevated OI can also signal potential volatility, especially if over-leveraged positions get liquidated. The Binance Heatmap revealed clustered liquidations just below the $17 zone, suggesting that a breakout or rejection could trigger rapid price moves. Therefore, while momentum remains bullish, caution is advised near resistance.

Chainlink is showing renewed strength as bulls push toward a key resistance level near $17.50. Spot demand, funding, and OI all support a bullish outlook. However, on-chain metrics and clustered liquidations suggest that a rejection remains possible. Whether LINK flips this range into support or faces another rejection will define its short-term trend trajectory.