Chainlink Open Interest Hits Record Highs; Implications for Price

CHAINLINK Link

In February, Chainlink experienced a remarkable surge in open interest, reaching unprecedented levels. Surprisingly, this surge persisted even as the cryptocurrency’s price saw a decline. This trend suggests a potentially bullish outlook for the future price of LINK.

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Chainlink’s open interest remained strong as January transitioned into February. Notably, there was a significant increase from below $250 million to over $320 million between January 31 and February 3.


Chainlink’s Open Interest Surges to Record Levels

In early February, Chainlink witnessed an unprecedented surge in open interest, reaching a pinnacle of $533 million, establishing a new all-time high for the asset. This remarkable milestone underscored a substantial interest among investors regarding Chainlink’s prospective price movements.

Subsequent to this surge, Chainlink’s price swiftly ascended to correspond with the heightened open interest, signaling investors’ confidence in the asset’s potential. Despite a minor retracement in open interest following the peak, Chainlink has consistently maintained a robust open interest exceeding $450 million since February 12.

As of February 23, data from Coinglass indicates that Chainlink’s open interest remains substantial at $456 million, demonstrating sustained investor interest and confidence in the asset’s trajectory. This persistent high level of open interest prompts a closer examination of Chainlink’s historical price response to elevated open interest levels.

Analyzing Chainlink’s Price Response to Elevated Open Interest

Recent records in Chainlink’s open interest levels prompt a reflection on past instances where similar elevated levels were observed. By examining how the price reacted during these periods, insights into potential price movements can be gleaned.

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During October-November 2023, Chainlink experienced a prolonged period of elevated open interest, more than doubling from previous levels. This sustained elevation persisted for almost a month, culminating in a notable price surge from $11 to $15, marking a substantial 36% increase.

Potential Price Projection

Should history repeat itself, a similar 36% increase from current levels could propel the LINK price to $24. Despite this surge, it’s worth noting that Chainlink’s previous all-time high of $52 suggests significant potential for further growth, with the projected price still remaining 50% below its peak.

LINK price shows strength at $17.9 | Source: LINKUSD on Tradingview.com

Conversely, there is the possibility of open interest levels tapering off, mirroring the trend observed in November 2023. In such a scenario, Chainlink’s open interest could relinquish its grip on the $450 million mark observed in February, potentially receding toward $400 million before staging a recovery.


Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.

 

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  • SHBAZ

    A crypto enthusiast, Loves to write, Loves to explore and stay up-to-date about the latest developments in the crypto world. #Btc #Crypto #NFT

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