Chainlink Funding Rate On Binance Reaches Four-Week High
The funding rate for Chainlink on Binance has reached its highest level in about four weeks, according to data from on-chain analytics firm Santiment. The funding rate refers to the fee that derivative traders are exchanging with each other. A positive funding rate indicates a bullish sentiment, with long holders paying fees to short investors. Conversely, negative values suggest a bearish sentiment, where shorts outweigh longs. The current significantly positive funding rate increases the likelihood of a long squeeze rather than a short squeeze. However, if LINK experiences a drawdown, there is strong on-chain support between $14.4 and $14.8.
On-Chain Analysis Indicates Strong Support for LINK
Analyst Ali pointed out that there is strong on-chain support for Chainlink between the $14.4 and $14.8 levels. This support is based on the number of investors who acquired their coins at these levels, with 17,000 addresses falling within this range. This suggests that it is a zone of strong support. On the other hand, resistance levels above the current price are thin with investors, meaning they shouldn’t pose significant obstacles if the rally continues. Santiment advises watching for FOMO forming a local top or prices surging towards $20 with little resistance as LINK regains the $16 threshold.
LINK Price Pulls Back after Breaking Past $17
Chainlink had briefly surpassed the $17 mark but has since experienced some pullback and is now trading below that level again.
Hot Take: Chainlink Faces Potential Top as Funding Rate Increases
The recent surge in Chainlink’s funding rate on Binance suggests a bullish sentiment dominated by long holders paying fees to short investors. This positive funding rate indicates the potential for a long squeeze rather than a short squeeze. However, if there is a drawdown, strong on-chain support is present between $14.4 and $14.8. Analysts also note that resistance levels above the current price are thin, indicating little resistance if the rally continues. As Chainlink regains the $16 threshold, it will be important to watch for signs of FOMO forming a local top or prices surging towards $20 with little resistance.
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