Chainlink: Bulls secured $7 support, can they push forward

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

• LINK was neutral on the 4-hour chart.
• Limited demand and elevated selling pressure may favor bears.

Chainlink [LINK] has been consolidating near the $7 support and psychological level for the past five days. The asset edged higher in the past few hours before press time, retesting the dynamic 50-EMA ($7.342). The slight upsurge followed Bitcoin’s [BTC] rise from $27.2k to $28.6k on 25 April.  

Read Chainlink [LINK] Price Prediction 2023-24

The mild BTC’s bullish sentiment could be attributed to the increased banking fears after First Republic Bank’s stock plunged 50% following the revelation of a massive drop in deposits.

However, next week’s (2-3 May) FOMC announcement could affect the above sentiment and whipsaw both assets. 

Are more price rejections likely below $7.5?

Source: LINK/USDT on TradingView

The price rejection at 50-EMA could push LINK to retest the $7 support before a likely rebound if bulls continue to secure the support. Notably, the 200-MA is also slightly above the 50-EMA – forming extra resistance against bulls’ attempted recovery. But the 200-MA continues to move horizontally – suggesting a likely consolidation. 

As such, the pair could oscillate between the $7 support and the moving averages in the next few hours/days. A close above the moving averages could set the pair to rally to $7.726 before facing more resistance from bears. 

Conversely, a drop below the $7 support could sink the pair toward the lower support levels. Therefore, sellers could take a break near $6.5 or March’s swing low of $5.9. 

The RSI retreated from the oversold zone, indicating buying pressure increased, but the neutral position at press time means the pair can go in either direction. However, the OBV dipped, reinforcing a limited demand and highly elevated selling pressure. 

Supply on exchanges increased

Source: Santiment

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On-chain metrics indicated LINK faced limited demand alongside elevated selling pressure, which may undermine a strong short-term recovery.

Notably, the supply on exchanges increased – reiterating more LINK moved to CEXs for offloading. In addition, accumulation declined further, as seen by the drop in supply outside of exchanges. 

Moreover, the recent surge in active addresses steadied at the time of writing – highlighting limited trading volumes, which could further favor sellers. However, LINK could surge if BTC reclaims the $29k price range.