Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- Chainlink maintains its bullish structure for the short term
- The drop in OI over the weekend may not be alarming, but the spot CVD could indicate a price drop
Chain link [LINK] saw its upward trend interrupted over the weekend. The debut of the Cross Chain Interoperability Protocol (CCIP) on the BNB chain was a positive development for the ecosystem.
Read the one from Chainlink [LINK] Price forecast 2023-24
Still, it was also possible that this news prompted holders to take profits, especially as LINK’s price approached a higher time frame resistance area. Recent hours saw LINK fall below $8 – can the bulls maintain their momentum?
The bearish order block at $8.2 stops the Chainlink rally for now
Source: LINK/USDT on TradingView
The $7.96-$8.45 region was highlighted in red and represented a bearish 12-hour order block. During the price action on July 20, this resistance zone developed, and the first real retest 71 days later showed some bearish resilience.
Still, the market structure remained bullish on the H4 chart. A move below $7.67 would be needed to shift this bias to bearish. Therefore, traders can keep an eye on this level and plan their trades accordingly.
The Relative Strength Index (RSI) stood at 52 at the time of writing. It indicated that the uptrend was still in play, but momentum was weak at the time of writing. Similarly, On-Balance Volume (OBV) has been in a strong uptrend since September 19, but stalled over the weekend.
A move below $7.67 could see a retracement south as high as $6.28, the 78.6% Fibonacci retracement level. Meanwhile, a move above $8.5 (above the bearish OB) would likely see LINK rise to $8.8-$8.9 before hitting major resistance.
Short-term market sentiment is turning tepid as Chainlink faces selling pressure
Source: Coinalyse
Over the weekend, Open Interest remained flat as the price experienced a slow decline from the $8.2 zone. More worryingly, the Cumulative Volume Delta (CVD) also showed downward movement. This showed that sales volume was dominant in the spot markets over the past two days.
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Therefore, it was possible that Chainlink could fall to $7.67, or even deeper. Trying to lunge LINK into the $8 region was not a good idea. Meanwhile, traders looking to go short can wait for a break in the market structure in the fourth half of the year.