Chainlink struggles to break out despite new protocol integration

Chainlink's (CRYPTO:LINK) price briefly recovered to $10 on September 4 after slipping below that mark the previous day.

This movement followed the integration of Chainlink's Cross-Chain Interoperability Protocol (CCIP) with Sonic Labs, formerly known as the Fantom Foundation, which aims to enhance interoperability between Chainlink and its blockchain.

According to market analysts, while this development might seem positive, LINK's price remains range-bound, facing challenges to rise significantly above its current levels.

The integration with Sonic Labs was announced on September 3, highlighting an opportunity for seamless interaction with Chainlink’s blockchain.

However, according to data from Santiment, Chainlink's 90-day Mean Dollar Investment Age (MDIA) has been on the rise since August 28.

MDIA measures the average age of tokens on a blockchain based on their purchase price.

An increase in MDIA suggests that more tokens are becoming dormant, making it harder for the price to surge.

Conversely, a decline in MDIA indicates more tokens are actively circulating, potentially driving prices higher.

With the MDIA trending upward, LINK could face stagnation in the near term.

Further supporting this outlook, Chainlink’s Exchange Net Position Change, which tracks whether market participants are holding or selling tokens over a 30-day period, has also been declining since late July.

This decline suggests a tendency among holders to keep their LINK rather than sell.

However, the rate at which tokens are leaving exchanges has slowed recently, indicating uncertainty about the cryptocurrency’s immediate price potential, according to Glassnode data.

On the technical side, LINK’s price is closely converging with its Relative Strength Index (RSI), currently at 40.22, suggesting weak momentum.

If bullish traders lose control of the $10 support, LINK could fall to $9.94, while a rise to $10.86 would serve as a key resistance level.

In the short term, LINK is likely to remain in this range-bound pattern.

According to trading experts, should the price exceed $10.86, it could signal a breakout, potentially pushing LINK to $12.65.

Conversely, a drop below $9.44 could see the token decline to $8.05.

As the market remains uncertain, traders should watch these key levels to better understand LINK's next move.

At the time of reporting, the Chainlink (LINK) price was $10.02.