Chainlink: Can waning demand see $6 flipped soon?

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

• Price rejection at $6.5 stalled bullish momentum. 
• Declining Spot CVD highlighted rising sell pressure.

Chainlink [LINK] continued to labor under the weight of its bearish structure. Over the past seven days, this stagnated the bullish momentum with price hovering just above the $6 support level.

Realistic or not, here’s LINK’s market cap in BTC terms

The contrasting fortunes in the general crypto market could lead to further slumps for LINK. Bitcoin [BTC] in particular has struggled to stay above $31k with the king coin trading at $30.5k, as of press time.

Bullish momentum slows down at $6 support level

Source: LINK/USDT on Trading View

While LINK’s short-term outlook on the four-hour timeframe looked bullish, the higher timeframes showed the altcoin’s structure was still largely bearish. Despite rallying from the $5 support level and breaking the bearish trendline on the 12-hour timeframe, the bullish momentum stalled after claiming the $6 level.

The price rejection at $6.5 ushered in some selling pressure. However, bulls held out to keep price above the $6 support level. Coupled with a 4.3% dip over the past 24 hours, further bearish activity might be on the horizon for LINK.

The RSI dipping below the neutral 50 highlighted the waning demand and indicated the developing bearish momentum. Also, the OBV remained largely flat, hinting at a lack of strong buying pressure which is key to sustaining a bullish rally.

With LINK finely balanced at the $6 level, two scenarios are possible in the short term. Further dips for Bitcoin could see LINK bears flip the $6 level to resistance. On the other hand, a bullish rally by BTC could give buyers the opportunity to push on from the $6 level again.

Read Chainlink’s [LINK] Price Prediction 2023-24

Indecision by speculators highlighted by fluctuating funding rate

Source: Coinalyze

LINK’s recent price rejection at $6.5 kept the futures market in limbo. Per Coinalyze, the Funding Rate wavered between positive and negative, as market speculators tried to weigh the next move for LINK.

Consequently, the Spot CVD remained in decline, highlighting the dip in demand and rising sell pressure. Altogether, buyers should look to exercise caution while closely monitoring BTC’s price action, as this could weigh significantly on LINK’s next move.