Chainlink faces pressure near $22 amid rising derivatives activity and institutional adoption through 21X. Technicals point to a $26 rebound or a test of deeper support price levels.
Chainlink recently launched 21X, the first regulated tokenized securities platform in Europe. It connects Chainlink to traditional financial institutions and has been approved under European rules.
21X CEO Max Heinzle claimed that Chainlink itself can be considered a critical part of market infrastructure. He noted that several of the world’s leading financial institutions are supporting tokenization projects. By using Chainlink, the project becomes available for broader adoption through a regulated pathway.
The integration underscores the plan for Chainlink to be the platform for the foundation of tokenized asset markets. Its interoperability solutions and secure data feed connect the world of decentralized finance with standard securities infrastructure. This connection between compliance and the utility of blockchains positions Chainlink for growth as tokenization gains momentum around the world.
This optimism has led to a wavy price action. LINK fell by almost 2% on Coinbase to trade at $22.40. The fall is an indication of its challenge in holding above the volume-weighted average price, which is at approximately $22.79.
The Fibonacci retracement levels show that the next support is at $22.08 and a more extended one at around $20.92. Assuming that sell pressure extends further, the price could drop to levels as low as $19.04 or even $17.16.
On the positive side, a recovery above VWAP may trigger a recovery. Previous August highs for LINK were over $26. Hence, it will be possible for the coin to test this level again unless sellers regain control. The big milestone would be a recovery towards $24, then a focus back to $26.
Fib. and VAWP. Source: TradingView
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The MACD line has become negative, and the histogram is showing decreasing short-term momentum. RSI at 40.15 is in the range of oversold, but does not suggest a definite reversal either.
The cumulative image is indicative of convergence, but also carries adverse risk. Bears seem active, but oversold conditions may give bulls an opportunity in case of stronger institutional inflows. The price performance around the $22 zone will dictate whether the sentiment will either stabilize or drop to lower levels of retracement.
MACD and RSI. Source: TradingView
According to the data from CoinGlass, the future volumes increased by 51% to 2.09 billion. Open interest also increased by 2.15% to $1.5 billion.
This dramatic increase in volume points to speculative positioning at important technical levels. The high open interest indicates that traders will prefer to retain positions, rather than having the positions closed. This suggests that they are expecting a significant turnaround.
Although an increase in leverage largely causes volatility, it also represents an increase in market interest in Chainlink. When support kicks in, bullish traders might have the advantage and drive LINK to the $26 finish line. But not defending existing levels would lead to liquidation and more drastic corrections.
Source: Coinglass
Chainlink is a token and critical infrastructure rolled into one. It acts as a stable portal to blockchain markets for institutions. It provides traders with a liquid and robust derivatives market. The forecast will now depend on LINK price reaction at the $22 support over the next sessions.
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