Chainlink Open Interest Reaches New Highs, Signaling Potential Bullish Trend for LINK Price
Chainlinkโs open interest has experienced a significant spike in February, reaching new all-time highs. This surge in open interest suggests a potentially bullish outlook for the LINK price, even amidst a decline in cryptocurrency prices.
Chainlink Open Interest Crosses $450 Million
The Chainlink open interest maintained its upward trajectory from January to February. Between January 31 and February 3, there was a notable increase from below $250 million to over $320 million.
- Continued rise in open interest led to a peak of $533 million, the highest ever recorded for Chainlink.
- Despite a retracement, Chainlink has sustained an open interest of over $450 million since February 12.
As of February 23, Coinglass data shows that Chainlinkโs open interest stands at $456 million, indicating a consistently high level. This prompts an examination of how the LINK price has historically responded to elevated open interest.
Historical Performance Of The LINK Price
Past instances of elevated open interest can provide insights into the potential performance of the LINK price under current conditions.
- In October-November 2023, when open interest more than doubled and remained elevated for almost a month, the LINK price experienced a positive reaction with a surge from $11 to $15 (a 36% increase).
- If history repeats itself, a similar increase could push the LINK price to $24. Considering its previous peak at $52 during the last bull market, this would still leave it 50% below all-time high levels.
However, it is also possible for open interest levels to taper off, as seen in November 2023. In this scenario, the LINK open interest could temporarily decrease from $450 million to around $400 million before recovering.
Hot Take: Chainlinkโs Open Interest Surge Points to Potential Upside for LINK Price
Chainlinkโs open interest reaching new all-time highs despite a decline in cryptocurrency prices suggests a bullish outlook for the LINK price. Historical trends indicate that sustained elevated open interest has previously resulted in positive price reactions. While a 36% increase could push the LINK price to $24, it would still be below its previous peak of $52. Alternatively, open interest levels may taper off before recovering. Keep an eye on Chainlinkโs open interest as it could provide valuable insights into the future performance of the LINK price.
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