Expecting LINK’s recovery? You should read this as…
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
- LINK dropped below a two-year low of $5.30
- LINK’s CVD witnessed a sluggish rise but the open interest rate tanked
Regardless of the Fed decision, a strong recovery in the crypto market could be elusive because of the Binance lawsuit. So, Chainlink [LINK], which had dropped below its 2021/2022 lows of $5.300, could face an uphill task reversing recent losses.
Read Chainlink [LINK] Price Prediction 2023-24
At press time, LINK’s price was $5.4, up from the two-year low after key whale moves, but key roadblocks could cap its upside.
What’s next for LINK?
After consolidating between $6.24 – $6.80 for most of May, LINK broke below the range, smashing the 2021 lows of $5.30. The drop eased at $4.761 before attempting a recovery, but the mild rally is headed into a key bearish zone.
A Fibonacci retracement tool was placed between the high at the end of April and the recent low. Based on the tool, the pocket between 23.6% and 38.2% Fib levels is a key resistance area because it aligns with an FVG (fair value gap) of $5.3 – $5.93 (white).
Hence, a negative price reaction at the above zone could set LINK to devalue to $5.4 or $4.76. Any move below the 2021 lows could head to $4.1.
Conversely, a session close above the 50% Fib level ( $6.13) could offer bulls a slight edge. However, the H12’s market structure will remain bearish unless LINK moves above the 78.6% Fib level ($6.915).
There was notable buying pressure from 10 June as Relative Strenght Index (RSI) climbed above the oversold zone. Similarly, the Chaikin Money Flow (CMF) crossed the zero mark, indicating a surge in capital inflows for LINK.
CVD rose, but OI tanked
The weak bullish momentum seen on the price charts was confirmed by the sluggish rising Cumulative Volume Delta (CVD). It shows buying volumes registered a slight uptick from 10 June.
How much are 1,10,100 LINKs worth today?
But the open interest (OI) rates declined from >$110 million to below <$80 million in the same period. This underscores the bearish sentiment in the futures market and could delay a strong LINK recovery if it doesn’t cross $100 million.