Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
Chain links [LINK] the recovery at the end of May stopped at $6,635, just above the mid-range. After that, sellers took control of the market and extended gains close to the low of $6.2.
The downturn followed From Bitcoin [BTC] price drop at $28k. While the king coin was trading at $27,000 at the time of writing, it had yet to transform its higher time frame market structure into bullish.
Will sellers regain control?
Source: LINK/USDT on TradingView
LINK has been range trading since May 8, with extreme ranges of $6.2 and $6.8. The low range of $6.2 also corresponds to a bullish order block (OB) of $6.25 – $6.4 (white) formed on the 4-hour chart. The bearish OB of $6.51 – $6.64 (red) also lines up with the mid-range of $6.53.
Unless BTC rises to $28k, LINK bulls may struggle to get around the bearish order block (OB). The roadblock could lead LINK to move south into the bullish OB ($6.25-$6.4) or the low $6.2 range.
A session closing above $6,635 will invalidate the above bearish thesis. Such an impulse move, especially if BTC retests $27.8k or $28k, could lead LINK to rally towards the high range of $6.8.
In the meantime, the RSI had retreated from lower ranges and passed the 50 mark – buying pressure was improving. Despite the slight rebound in OBV, it has reached lower lows since the end of April, reducing aggregate demand over the same period.
Bulls had little influence
Source: Coinglass
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At the time of writing, long positions dominated the exchanges by 52%, indicating an optimistic view of the 4-hour timeframe in the futures market. But sellers couldn’t be outvoted just yet, given the roadblock above the mid-range segment.
However, a bullish BTC could tip Chainlink bulls to break the bearish OB and aim the range high. Therefore, traders should monitor this front before making a move.