Chainlink Price Forecast: LINK technical breakout eyes $16 amid improving on-chain metrics
|- Chainlink recently broke out of a falling wedge pattern but stalled short of $15.
- Recovery is underway, and it could see LINK make a giant leap to $18 while supported by improving on-chain levels.
Chainlink is nurturing an uptrend after closing the day above the 50 Simple Moving Average. The immediate target on the upside is $16, but the recovery could go as high as $18 if enough volume is created behind LINK.
Chainlink breaks above a key technical pattern
The formation of a descending wedge pattern on the daily chart resulted in the midweek bullish outlook. As Bitcoin hit new all-time highs close to $24,000, LINK rallied past $15. However, the seller congestion at $16 was left untested.
A falling wedge pattern comes into existence when an asset’s price has sustained a downtrend over time—the pattern hail from the downtrend, losing momentum while trendlines drawn along the peaks and the lows converge. Bulls start to step in to regain control over the price, and a breakout happens just before lines converge.
High volatility swept across the cryptocurrency market, resulting in a sharp downswing to the support at $12. Recovery ensued, putting Chainlink back on the growth path to $16. The Relative Strength Index reinforces the improving technical picture as it grids towards the overbought area.
LINK/USD daily chart
According to Santiment, a leading provider of on-chain indicators and analysis, Chainlink’s network growth is rising. Following the spike in November that saw the number of new addresses joining Chainlink top 3,450, a decline touched 2,250 on December 15.
At the time of writing, new addresses on the network have surged to almost 3,600, representing a 37.5% increase. High network growth is usually a bullish signal for the project’s future adoption and the token’s value. Hence, the ongoing Chainlink price recovery could gain momentum.
Chainlink network growth chart
Note that the expected breakout to $16 and $18 will fail to materialize if Chainlink slumped and closed the day under the 50 SMA. Selling pressure is likely to increase, pointing LINK on a downward trajectory to retest $12 and $11, respectively.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.