As $LINK approaches $14, Chainlink is going through another increase in both market and derivatives activity. Over the course of the last day, open interest has increased by about 25%, adding leverage to a market that was already forming a solid bullish structure.
ChainLink enters breakout
Since $LINK open interest had already significantly recovered prior to the most recent price breakout, the derivatives data is especially significant. According to the given data, OI was roughly $650.7 million on September 24, while during most of the spring and early summer, levels were closer to $350–$450 million.
An additional 25% daily rise suggests that traders are actively creating new positions instead of just reducing their exposure. The direction of price movement is the same. $LINK reached just above $14, its highest level on the displayed chart, and is currently trading at about $13.96.
The move comes after a significant August breakout above the 200-day moving average around $9.50, which was followed by a string of higher highs and higher lows. Since $LINK has now surpassed the previous September high at roughly $13.70, the most recent acceleration is especially noteworthy.
As a result, the chart's most noticeable local resistance has been eliminated. While the major moving averages are increasingly in a favorable alignment, volume has also increased during the advance. The shortest average has risen to $12, with intermediate averages ranging from $11 to $11.30.
Near $10.30, the 200-day average is still significantly lower. The intensity of the momentum has increased, but it hasn't reached the extreme levels of some earlier $LINK rallies. The fact that the RSI is still below the highly overbought area indicates that, should demand continue, there may be more room for market growth.
Volatility creates additional risks
The psychological $15 level comes after the first significant target, which is currently $14.50. However, there is an increased risk of liquidation when open interest grows quickly. Even a relatively small reversal could cause an accelerated flush if a significant portion of the new positioning involves leverage.
The first significant support zone on the downside is between $13 and $13.20. Below that, $12–$12.20 is crucial. For the time being, both price and open interest are rising at the same time. In addition to supporting the breakout, this combination indicates that $LINK is about to enter a much more leveraged and potentially volatile phase.