- Chainlink tested a crucial support level at the time of writing.
- On-chain and price action clues suggested that the bears might force further losses.
Chainlink [LINK] rose 2% on the 16th of June, which appeared to be the beginning of a 16% rally. However, these hopes were dashed in the past 24 hours as Chainlink recorded a 3% price drop until press time.
This came alongside an unsteady Bitcoin [BTC], whose price action fluctuated based on the most recent news updates from the Middle East.
For its part, Bitcoin is expected to see a bullish reaction in the range of $102k-$104k and a bearish reaction near $108k-$110k over the coming week.
At the time of writing, Chainlink offered a good buying opportunity with a clearly defined exit. The mid-range support at $13.2 is expected to serve as support. The OBV showed seller dominance and the RSI was bearish.
Hence, though there’s a chance of a rally from the mid-range support, traders should be prepared for a price drop below $12.64.
A Bitcoin recovery could again shift LINK’s market sentiment.
Chainlink bulls will be hard-pressed to drive a rally
LINK’s In/Out of the Money showed that the $13.6-$13.9 was a relatively large supply zone nearby. A rally from the $13 support would need significant demand to boost the price beyond $14-$14.4, another supply zone.
But this did not appear likely, based on the weak price action of June. The chart supported the idea that the price might drop to $12.1, or even as deep as the range low at $10.8.
The exchange netflows data showed some accumulation over the past week. The figure of -261k LINK meant an outflow worth $3.44 million. Outflow from exchanges was a good sign as it showed accumulation.
The netflows in June have been positive for the most past, with some accumulation over the past five days. The 30-day change showed nearly 79k LINK worth $1.04 million moving into exchanges.
Overall, the price action and the IntoTheBlock data favored a bearish move over the coming days. Traders can use a drop below $12.64 and a subsequent retest of $13 as resistance to look to enter short positions.