Chainlink defends $7: Can it recover recent losses?

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

• Chainlink’s lower timeframe market structure bias was bullish at press time. 
• The 2023 supply zone of $8 had significant sell limit orders. 

During the recent October pullback, Chainlink [LINK] defended the $7 psychological level. On the early Asian trading session on 16 October, LINK zoomed past $7.3 and flipped the 4-hour chart market structure to bullish bias. 

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A previous LINK price analysis by AMBCrypto evaluated the possibility of sellers extending gains to the $7 psychological level. The idea was vindicated as buyers re-grouped at the level in the past few days. 

Can LINK extend the recovery?

Source: LINK/USDT on TradingView

LINK’s September massive recovery faltered at the 2023 supply zone of $8.0 – $8.8 (red). The pullback that followed eased at the $7 psychological level. Interestingly, the level was confluent with the 50% Fib level and H12 bullish order (OB). 

The Fib tool was based on the recent high of $8.2 on 30 September and the previous low of $5.7 on 11 September. Based on the tool, the immediate hurdles were 78.6% Fib ($7.73) and the 2023 supply zone of $8.0 – $8.8 (red). 

At press time, price action moved beyond the recent lower high of $7.43. The upswing flipped the H4 market structure to a bullish bias. So, sellers could wait to re-enter the market at the overhead resistance levels – 78.6% Fib level and the 2023 supply area. 

The 50% Fib level will be a key buying interest for bulls and a shorting target for sellers if the price falters at overhead hurdles. 

Meanwhile, the RSI and OBV were positive at press time. It indicated that buying pressure spiked alongside improved demand from the Spot market. However, the capital inflows remained muted, as shown by the negative CMF in the first half of October. 

Key buy and sell limit orders at $7 and $8

Source: Mobchart

According to Mobchart, key buy and sell limit orders were placed at the $7 and the supply zone. On the Binance Exchange, sell limit orders of 74.43k LINK were placed at $8 at the time of writing. 

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Similarly, there were considerable buy limit orders between $7.0 and $7.1, which coincided with the marked white area on the price charts (H12 bullish zone).  

Ergo, LINK’s recovery could aim at the 2023 supply zone, but a faltering in the area could force bulls to regroup at the $7 psychological level.