Chainlink Price Prediction: LINK is at a crossroads, on-chain data indicates strong resistance.

Gate news, Chainlink (LINK) has shown a downward trend at the start of this week after experiencing a pump over the weekend. As of the time of this report on Monday, the price has fallen over 2%. Both technical outlook and on-chain data indicate that LINK is facing strong supply pressure, which could lead to a continuation of its pullback momentum, thereby suppressing the surge of open contracts in the derivatives market. LINK is currently at a critical crossroads, and its future trajectory will depend on whether it can overcome these resistances.

1. On-chain data indicates strong resistance

According to IntoTheBlock's Global In/Out of the Money (GIOM) indicator, LINK is currently in the "at parity" range, which spans from $13.06 to $14.06. Within this range, approximately 50,000 investors have purchased 105.38 million LINK tokens at an average price of $13.57. This means that once the price approaches this range, these investors may choose to sell to break even or reduce losses, thereby creating selling pressure.

The more direct supply range is located between $14.06 and $14.29, which includes 13,720 investors holding 19.83 million LINK. As LINK falls under supply pressure above "parity", it faces the risk of a bearish reversal. Due to the pressure from the high supply area, Chainlink is trading at the lower end of the "parity" range, indicating that the path of least resistance is downward.

On the other hand, the immediate "in-the-money" area extends from $12.74 to $13.06, holding 11.38 million LINK tokens purchased by 139,400 investors, which can absorb the upcoming supply and form a certain level of support.

2. The LINK derivatives market shows optimistic prospects

Despite the pressure in the spot market, Chainlink's derivatives market shows a relatively optimistic outlook. Coinglass data indicates that the open interest surged by 3.84%, reaching $559.76 million on Monday. The surge in open interest reflects an increase in buying pressure in the derivatives market, signaling a warming of optimistic sentiment.

The weighted financing rate for positions surged from 0.0004% on Sunday to 0.0086%, further confirming the increase in bullish activity. When buying activity drives up swap prices to offset imbalances, the bullish side pays a positive financing rate, and vice versa. This indicates that, despite the pullback in spot prices, some traders remain optimistic about LINK's future performance.

3. LINK Price Analysis: Difficult to Maintain Momentum

(Source: Trading View)

FXStreet analyst Vishal Dixit stated that as of the time of this week's Monday publication, Chainlink has fallen over 2%, nearly offsetting the rebound momentum since Sunday. LINK had surged 17% in the past week, but started weak this week, dropping below the 200-period exponential moving average on the 4-hour chart (EMA).

Under the influence of the current recovery trend, the 50-period and 100-period EMA are gradually approaching a bullish crossover. However, this DeFi token must break through the upper resistance trend line formed by connecting the volatility highs of May 12, May 23, and June 11 in order to establish an upward trend.

If LINK breaks below the 13.12 USD 50-period EMA, the downtrend may extend to the support level of 12.63 USD, which was last tested on June 18. The Relative Strength Index (RSI) is at 52, pointing downwards and reversing from near the overbought area, indicating that buying pressure is rapidly fading.

From a positive perspective, any pullback depends on whether the currency pair can close above the trend line near the monthly high of $14.17. The next resistance level is at $15.02, with the last test being on June 10.

Conclusion:

Chainlink is currently at a critical crossroads. Despite the optimistic sentiment in the derivatives market, the strong supply pressure indicated by on-chain data and the weak performance of spot prices pose downward risks for LINK. Whether it can break through key resistance levels and maintain above significant moving averages will be crucial in determining its future trend. Investors should closely monitor the supply range for LINK between $13.06 and $14.29, as well as the support level at $12.63.