Where will Chainlink head next as it finds an obstacle at $6.2
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Chainlink has a bearish structure on the 1-day chart.
- Despite the short-term bounce, further losses were likely based on the HTF price action.
Chainlink [LINK] saw interesting developments on-chain in recent days. Data showed that the supply of LINK on exchanges reached a low last seen in December, 2022 and June, 2023. This could see a bounce in prices and a possible short-term uptrend.
Read Chainlink’s [LINK] Price Prediction 2023-24
The market structure of LINK was bullish at the time of writing, but there was a critical short-term resistance around the $6.2 zone. Here’s what the various indicators and the short-term price action had to say about LINK’s next price move.
A rejection from the bearish order block was a likely scenario for ChainlinkEven though the H4 market structure was bullish, the red box at $6.2 represented a bearish order block. The $6.2-$6.32 is an area where sellers are likely to be strong, and the bulls could face exhaustion after reaching this region.
The most recent candlestick was bearish at press time, which suggested a rejection could occur. This could take a few more trading sessions to materialize. The DMI showed that a strong Chainlink uptrend was not in play yet as the ADX (yellow) was below the 20 mark.
However, both the RSI and the CMF highlighted strength from bulls. The RSI reading of 61 showed significant upward momentum and the CMF at +0.1 signaled notable capital flow into the market.
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The slow ascent in Open Interest showed bullish speculators were creeping inIn the past 48 hours, Chainlink climbed from $5.95 to reach $6.27, which was a 5.4% bounce. The Open Interest also rose from $94 million to $100 million, which suggested there was a small amount of bullish conviction in the futures market.
This was sharply contrasted by the spot CVD, which dived southward over the past two days. A lack of demand from spot buyers indicated the bounce was a liquidity hunt, and that LINK is headed toward $5.95 and lower in the coming days.