As of the latest data, Chainlink (LINK) appeared to be experiencing a weakening trend. The current trading price for LINK stands at $11.38, reflecting a minor 0.6% decline despite a 4% surge in the past week. Interestingly, the trading volume for LINK on spot exchanges also saw a decrease of approximately 9%, indicating a dwindling interest in this alternative cryptocurrency.
Conversely, a recent analysis of the Futures market revealed a growing number of traders taking positions on LINK. The Open Interest (OI) has surged to a 13-week peak of $206 million, signaling an increased level of participation among derivative traders who are speculating on future price movements.
However, it is essential to acknowledge that similar spikes in Open Interest have historically foreshadowed price declines for LINK. An instance of this occurred back on July 22 when LINK’s OI peaked, preceding a sharp 45% drop in its price over a two-week period.
In late September, LINK’s OI once again climbed to a two-month high before the cryptocurrency’s price plummeted by nearly 20%. Following these historical patterns, it is reasonable to anticipate a potential shift towards a bearish sentiment for Chainlink.
Bullish Indicators for Chainlink
Examining LINK’s daily chart, the Relative Strength Index (RSI) is currently positioned at 52, indicating a neutral stance where buyers slightly outnumber sellers. The RSI line remains above the Signal line, implying a prevailing bullish momentum.
Nevertheless, there appears to be a recent downturn in the RSI line, signaling an influx of sellers in the market. The weak bullish sentiment is further confirmed by the Awesome Oscillator’s (AO) bars, which, although green, depict a negative trend, suggesting insufficient buyer participation to maintain an upward trajectory.
Additionally, a descending triangle pattern has formed for LINK, typically signaling a bearish continuation. While the cryptocurrency is presently trading near the upper boundary of this pattern, indicative of bullish attempts to gain control, a breakout typically requires a surge in buying volumes. Notably, volume histograms show a scarcity of buyers amid intermittent selling activity.
If buyers re-emerge and invalidate the bearish scenario, LINK may face resistance at $12.94. Conversely, if the bearish trend persists, the cryptocurrency could target a support level at $10.40.
One potential catalyst that could reignite LINK’s upward trajectory is increased whale activity. While large transaction volumes surged to $100 million earlier this week, current volumes have dwindled to $36 million, signaling a period of inactivity among large buyers. This could potentially lead to subdued price performance in the near term.