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- Technical indicators support Chainlink’s bullish outlook, with MACD and RSI indicators hinting at room for growth before reaching overbought conditions.
- However, derivative market activity presents mixed signals, as rising open interest points to heightened trader engagement.
Chainlink (LINK) price has formed a clear ascending triangle pattern on the charts, suggesting further bullish momentum may continue to build. The ascending triangle pattern suggests that the buying pressure is greater than the selling pressure. These aggressive buyers are initiating continuous purchases for LINK at higher prices every time it dips.
What’s Next For Chainlink Price?
The resistance zone, located near the $27 mark, remains pivotal. A successful breach above this level could confirm a breakout, pointing toward a potential price surge. Supporting this outlook, trading volume data revealed increased activity during price upswings, indicating robust interest from buyers, per the CNF report.
Moreover, technical indicators provided more insights into the potential price movement of LINK. The Moving Average Convergence Divergence (MACD) indicator, which is at the moment hovering around the zero line, may continue to move upwards if it breaks above the zero line. On the other hand, the Relative Strength Index (RSI) is at a neutral 52.50, meaning that the asset still has room to climb before it reaches overbought conditions.
If there is a confirmed breakout, the price will run to nearly $33, calculated by adding the pattern height to the breakout level. This will translate to an increase in price beyond 30% from the current prices, as observed in the bullish price movements in the last couple of sessions with respect to LINK, reported CNF.
Derivatives Data Shows Mixed Sentiment
Derivative market activity was complex. Open interest data, which tracks the total number of unsettled derivative contracts, recently showed significant growth in tandem with the recent Chainlink price behavior. This rise suggests heightened trader engagement, often a precursor to increased price volatility.
Yet the summed-up futures bid-ask delta told another story. Sell orders, in the last five days, outpaced buy orders. It may be the case that traders are closing profits on the recent rally in price or preparing to run for cover in case the price goes into a correction mode. The arrival of large sell orders tends to have a bearish effect unless sufficiently balanced by buying interest.
This juxtaposition of increasing Open Interest with a negative bid-ask delta leaves the market at a very critical juncture. Thus, LINK traders were advised to keep a close eye on these metrics as they hint at potential price turbulence ahead.
As expected, the current Chainlink price dip to $23.13 has pushed the open interest 16.40% down to $587.95 million today, according to Coinglass. Furthermore, the long liquidations have surged to a whopping $11.18 million, suggesting short-term sell pressure that could weigh on the LINK price.
