Chainlink [LINK] retreats to key demand zone and what that means is…
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
- LINK has been oscillating between $7 and $8.5 since late July
- Demand for LINK wavered in the Futures market in August
Chainlink [LINK] has maintained its narrow-range trading of $7- $8.5 – A dull price action for traders used to price volatility. However, macro-traders have something to look forward to – The FOMC Minutes Meeting of July 25-26, scheduled for Wednesday (16 August).
How much are 1,10,100 LINKs worth today?
In the meantime, Bitcoin [BTC] has recorded three daily candlestick session closes below the $29.5k range-low since Thursday (10 August). It reinforced a weakening stance, one that could delay a solid short-term recovery for most altcoins, including LINK.
LINK inching closer to a demand zone
The price zones marked in red and cyan are key supply and demand zones. On the zoomed-out H4 chart, the supply zone of $8.06 – $8.8 (red) is also a daily bearish order block (OB) and price ceiling since mid-April.
On the other hand, the demand zone of $6.8 – $7.3 (cyan) was a key support in March, April and May. Although it was flipped to resistance in May and June, it was reclaimed as support in July and prevented extended price drops since late July.
At the time of writing, the price action inched closer to the above demand zone. A retest could offer a buying opportunity, targeting the supply zone.
Even so, conservative targets could be placed at the recent lower high of $7.92 since the last retest and rebound didn’t wield enough momentum to hit the supply zone.
Conversely, a breach of the demand zone could set LINK to retrace further to $6.5 or $6.0-levels.
The RSI and CMF retreated south, indicating easing buying pressure and capital inflows. But the RSI attempted to cross the mid-range at the time of writing, indicating mild buying pressure.
Open Interest rates wavered in August
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LINK’s Open Interest (OI) rates dipped after peaking above $300 million on 21 July. After that, the OI declined and wavered between $155 million and $180 million in August.
The aforementioned trend denotes stagnant demand for LINK in the derivatives market over the same period. It confirms range trading and possible extension, if the trend persists.
On the liquidation side, LINK short positions were extremely wrecked across all timeframes. It points to a likely price pivot to the upside, but a weak BTC below the $29.5k range-low could delay the recovery.