One analyst explained how the path to a new all-time high could be opened for Chainlink (ATH) if LINK can break through this resistance block.
Chainlink could find significant resistance at the $20 level
In new mail At X, analyst Ali Martinez discussed what LINK’s barriers to resistance currently look like in terms of on-chain cost-based distribution.
Below is the chart from market intelligence platform IntoTheBlock shared by the analyst. It shows how much of the asset was acquired at each price range that Chainlink has visited in its history.
As shown in the chart, many Chainlink investors purchased their tokens within the range of $18.4 to $26.3. More specifically, about 100,220 titles received 57.2 million links at these price levels.
In cross-chain analysis, the potential for any price range to act as support or resistance is measured using the number of coins purchased within it. The reason behind this lies in the psychology of the investor.
In general, stockholders consider their cost basis to be a special level because retesting it can flip their P&L situation. As such, they could be more likely to make panic movements when this retest occurs.
Investors who take a loss before a retest may fear that the price will return soon, so they may be tempted to sell and recover their money.
Likewise, holders whose cost basis has been retested from above could decide to accumulate more, believing that the level will eventually become profitable again.
Both of these effects are insignificant when the cost basis is backtested for a small number of investors. However, in a scenario where the cost basis of many addresses is in a narrow range, the reaction resulting from the retest may be large enough to cause pronounced fluctuations in the asset.
The aforementioned Chainlink price range around the average value of $22 carries a cost basis for many investors, so it is possible that LINK will find it difficult to break through these levels.
However, as Martinez pointed out, if the cryptocurrency can clear this hurdle, a new ATH will likely be easy to reach since not many investors currently have a holding level in the price range beyond the $22 demand zone.
Regarding the ranges under the current price, there are two big ranges nearby, such as $13 to $15 and $11 to $13. If the asset goes through a correction, these levels will likely help mitigate the decline.
Link price
Chainlink has seen a roughly 10% rise in the past 24 hours, bringing its price to $18.4.