Chainlink unable to hold onto 2023 price ceiling: What now?

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

• LINK recovered Q2 losses but hit the 2023 supply zone.
• The funding rates wavered while Open Interest rates eased.

Chainlink [LINK] recovered almost all the losses suffered in Q2. The altcoin hiked over 50%, rising from a low of $5 in mid-June to about $7.7 at the time of writing. But price action has hit a familiar 2023 price ceiling and supply zone. 

Is your portfolio green? Check out the LINK Profit Calculator 

In the meantime, Bitcoin [BTC] had breached its range formation and dropped below the key range-low of $29.5k, weakening the king coin’s structure. The weak BTC could further frustrate LINK bulls from bypassing this 2023’s supply zone. 

Will bulls withstand the selling pressure?

The $8.1 -$8.8 supply zone (red) has been a crucial price ceiling in 2023. LINK faced intense selling pressure during previous retests of the supply zone in mid-February and mid-April. The retest in mid-April saw LINK shed over 40%, only to steady at $5. 

But LINK’s recovery has reversed all the Q2 losses after hitting the supply zone again. After a recent price rejection, the first leg of pullback saw LINK retrace to $7.3. But the altcoin’s rebound has faced another rejection at the supply zone near $8. 

The immediate support of $7.3 could only hold a second pullback if BTC doesn’t drop below $29.0k. In such a case, LINK bulls could attempt to invalidate the price ceiling and target the next resistance at $9.5. Notably, the $9.5 is another price ceiling for the second half 2022. 

If BTC drops below $29k and the $7.3 support cracks, the next support levels to watch are $6.8 and $6.5. 

Meanwhile, the RSI has been above the neutral level since mid-June, confirming massive buying pressure in the past few weeks. Similarly, CMF (Chaikin Money Flow) stayed above the zero mark, showing strong capital inflows over the same period. 

Funding rates wavered as Open Interest dipped

How much are 1,10,100 LINKs worth today? 

On Coinalyze’s 1-hour chart, aggregated funding rates remained low and later wavered from 22 July. Wavering funding rates could give sellers an edge, especially with a weak BTC. 

In addition, Open Interest (OI) rates declined after peaking at over $280 million on 20 July. At the time of writing, OI was below $200 million, emphasizing the bearish sentiment in the futures market.