Chainlink [LINK] hits a key hurdle – Is a reversal likely?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
- LINK’s recovery has eased at March low
- Buying volumes and Open Interest rates decreased
Chainlink [LINK] chalked a sideways structure ahead of ECB (EU Central Bank) Forum on Central Banking scheduled for 28 June 2023. US Fed Chair Jerome Powell will also grace the meeting, and investors are particularly eyeing his speech.
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Market direction after the meeting could depend on whether key speeches take a hawkish or dovish stance. In the meantime, BTC fluctuated above $30k while LINK’s range formation extended within $5.9 – $6.3.
Will LINK lose hold of the March low?
LINK’s structure was bullish on the daily timeframe after climbing above the March low of $5.917. But that’s just a bullish intent and not an outright uptrend. Besides, a bearish order block (OB) exists on the daily chart at $6.0 – $6.3 (red). So, bulls could only claim leverage if they move above $6.3.
The Relative Strength Index (RSI) had eased from the overbought zone and slid below the 50-mark – emphasizing a sharp decline in buying pressure. Similarly, the On-Balance Volume (OBV) moved sideways, indicating demand stagnated in the past few days.
A negative price reaction at the confluence of the March low and the bearish OB could drag LINK to the lower high and previous range-high of $5.4. The next immediate support level is $5.0.
Conversely, a move above $6.3 will make $6.66 and $7.7 the next target for near-term bulls. But such an upswing will depend on BTC’s upside above $31.4k.
Buying volumes eased
Despite the rising Open Interest (OI) rates between 20 – 24 June, Cumulative Volume Delta (CVD) spot eased significantly. It shows the rising demand (uptick in OI) in the futures market didn’t drive massive buying pressure on the spot side.
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But both metrics declined in the past few hours at the time of writing. It paints a short-term bearish outlook for LINK. Bulls can wait for a pullback retest on $5.9 or $5.4 to go long, provided BTC remains bullish.