LINK struggles to defend $6 – Will it dip further?
Sellers could sink LINK to the next key support - An H12 bullish order block near $5.5.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- H4 and H12 market structures had a bearish bias.
- The Open Interest rates have declined since July.
Sellers cemented their grip on crypto markets in August, exposing Q3 to more losses. Chainlink [LINK] was no exception. According to TradingView’s monthly performance, LINK was down over 20% in August at the time of writing.
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After an impressive recovery in July, with +19% gains, sellers’ action in August reversed the gains. September’s price action could be swayed by the FOMC Meeting as a hawkish stance could lower prices.
Will sellers extend gains?
Since 24 August, the Relative Strength Index has remained below a key threshold, undermining buyers’ leverage. A similar negative reading was recorded on the Chaikin Money Flow (CMF), underscoring muted capital inflows to LINK markets.
The H4 chart’s market structure was bearish and could only flip bullish if LINK crossed above $6.45. The same applied to higher timeframe, specifically the H12 chart, reinforcing sellers’ market control.
At the time of writing, sellers were determined to crack the $6 level and could extend gains to the H12 bullish order block of $5.51 – $5.72 (cyan).
Although LINK bulls could be tempted to go long at H12 bullish OB, caution was necessary as a solid BTC recovery wasn’t on the cards yet as of press time. LINK could drop even lower to $4.99 if BTC records more losses.
How much are 1,10,100 LINKs worth today?
Open Interest rates tanked
According to Coinglass, LINK’s Open Interest rates have tanked from a high of >$300 million in July to around $133 million in August. It demonstrates the decline in demand for LINK on the derivatives side, a bearish bias.
Besides, more long positions were rekt across all timeframes in the past 24 hours before press time, reinforcing a short and long-term bearish bias. So, going long at the H12 bullish OB could be risky unless BTC fronts a wild upswing.
