Chainlink hits a key supply zone – Can bulls weather the selling pressure?

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

• Chainlink [LINK] hit a crucial sell pressure zone above $7.5.
• LINK’s open interest (OI) surged but may face headwinds.

Chainlink [LINK] has been in a consolidation phase for the past few weeks. It oscillated between a critical supply (red) and demand (green) zone. So far, the supply zone above $7.5 has proved a challenge to bulls. 

Read Chainlink’s [LINK] Price Prediction 2023-24

Can bulls bypass the sell pressure zone?

Source: LINK/USDT on TradingView

LINK was bullish on the 12-hour chart, as shown by the RSI’s value. Similarly, the OBV (On Balance Volume) has risen, boosting the recent uptrend but faced a downtick at press time. But LINK has reached the sell pressure area (red) of $7.520 and $7.813. 

The zone has also been a critical resistance level on the three-hour charts. As a result, bulls may still find difficulty overcoming it, especially if BTC fails to reclaim the $25K level. 

Ergo, bears could profit from short-selling opportunities at $7.529, or $7.292, if the price correction extends toward the demand zone (green). The $7.003 or $6.669 levels can also be ideal buying opportunities, so sellers can lock profits at these levels. 

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A session close and confirmation above the supply zone will give bulls a clear view to target the $8 value and the pre-FTX level of $9. But the upswing will invalidate the above bearish bias.

LINK’s open interest rate increased, but …

Source: Coinglass

As per Coinglass, LINK’s open interest (OI) rate increased tremendously from 17 February. It shows a massive demand for the altcoin in the futures market, thus reinforcing the bullish sentiment, at the time of writing. 

In addition, over $550K worth of short-positons were liquidated in the past 24 hours alone, according to Coinalyze. This further lends credence to a possible extra rally. However, close to $100K worth of long-positions has been rekt, too. This calls for caution. 

An upswing above $7.5 and steadily rising OI will give bulls impetus to target the $8. However, any drop in OI will provide bears with more market influence.