Chainlink’s (LINK) price increased 8% in early trading today, March 6. This upswing comes two days after LINK’s price dropped below $15 this year.
As of now, Chainlink’s price has surged to $17.50. Bulls seem confident that a deeper decline is unlikely despite a brief pullback. But can the cryptocurrency succumb to their demand?
Chainlink Long Positions Surge
According to Coinglass, the Chainlink Long/Short ratio, which measures investor sentiment in the market, has risen to $1.38. As the name implies, the ratio compares the number of short sellers (bears) to the long buyers (bulls).
The ratio below 1 indicates that short positions are dominant, and most traders expect the price to decline. On the other hand, a reading above 1 indicates the dominance of longs.
As of this writing, LINK long positions accounted for nearly 58% of the total open contracts in the market, while shorts accounted for 42%. This position means Chainlink bulls dominate the market, with the Long/Short ratio reaching the highest level this year.
Should this remain the same, demand for LINK contracts in the derivates market might continue to surge. In turn, the cryptocurrency’s price might evade undergoing a notable correction.
Support Holds at $15
Beyond these bullish positions, the In/Out of Money Around Price (IOMAP) seems to support the extended price increase. Using the volume of tokens in unrealized profits or losses, the IOMAP shows whether a cryptocurrency has strong support or resistance.
A higher volume of money indicates stronger support. On the other hand, it signifies resistance.
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As of this writing, LINK’s major support is around $15. At this price level, 22,610 addresses accumulated 115.87 million LINK tokens.
The volume at this level is more than those purchased between $17.38 and $19.98, which are currently in unrealized losses.
Due to this, the price is unlikely to experience massive selling pressure, and Chainlink bulls might push the price beyond $20.
LINK Price Analysis: $20 Retest Possible
Interestingly, the 4-hour chart also aligns with this bias. During that timeframe, CCN observed that the Bull Bear Power (BBP) had notched a positive reading.
The BBP is a technical oscillator that measures buyer and seller strength across different timeframes. When the reading is negative, bears are in control.
But since the reading is positive now, Chainlink bulls have the upper hand. With LINK already forming a V-shaped recovery, the price might rise to the 0.236 Fibonacci level near $20.
If bears continue to play second fiddle to bulls, an increase to $22 is also possible. However, if bulls let their guard down and bears take advantage, this rally toward $20 might not happen. Instead, LINK’s price could slide to $13.18.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
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