- 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.
-637438764214977785.png)
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.
%20[11.05.15,%2018%20Dec,%202020]-637438764324158384.png)
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Ripple on-chain metrics show bullish signs amidst legal struggle with SEC, XRP eyes recovery
Ripple made a comeback above $0.48 on Tuesday and hovers above that level in Wednesday’s European session. Ripple on-chain metrics such as transaction volume and Network Realized Profit/Loss have turned bullish, supporting a recovery in the altcoin.
Bitcoin price falls amidst German government transfers, miners activity
Bitcoin (BTC) extends correction on Wednesday and hovers around $61,000 after finding resistance near the $64,000 level on Monday. Recent on-chain data indicates heightened selling activity from Bitcoin miners early in the week.
Crypto Today: Bitcoin erases gains from end of June, Ethereum declines while Ripple holds
Bitcoin wipes out gains from the last week of June and falls below $60,000 on Wednesday. Ethereum and top altcoins ranked by market capitalization erased gains as the inflation outlook worsened. Ripple holds on to recent gains and hovers above $0.48 on Wednesday.
Three reasons why altcoins could shake off losses this week
On-chain data from Santiment shows that altcoins are currently in the opportunity zone, or generating buy signals. The top three altcoins in the buy zone are Basic Attention Token (BAT), Chromia (CHR), and Highstreet (HIGH), per Santiment.
Bitcoin: BTC price correction could end in July, according to seasonal data
Bitcoin (BTC) price appears poised for a decline this week, influenced by slight outflows in US spot ETFs, selling activity among BTC miners, and a combined transfer of 4,690.28 BTC to centralized exchanges by the US and German governments.