The Chainlink price suffered a harsh reversal over the past two weeks, moving into a bear market after a 20% decline from its highest point this year.
Here are the top five reasons why the token could be ripe for a strong bullish breakout.
Summary
- Chainlink price has formed a cup-and-handle pattern.
- The recently launched LINK reserves are growing.
- The SEC will likely approve the Bitwise LINK ETF.
Chainlink price forms a cup-and-handle
Chainlink (LINK) has strong technicals that may boost its price in the coming weeks. It has remained above the 50-day exponential moving average, a sign that the bullish trend is still intact despite the recent pullback.
Chinlink has also found support at the strong pivot reversal point of the Murrey Math Lines tool. It is common for a cryptocurrency to rebound after retesting this support level. LINK is also above the Ichimoku cloud indicator.
Most importantly, the ongoing LINK price retreat is part of the formation of the cup-and-handle pattern, whose upper side is at $27.17 and lower side is at $10.15.
Measuring the same distance from the cup’s upper side gives it a target of $44, which is about 100% above the current level. A drop below the major S/R pivot point at $18 will invalidate the bullish outlook.
LINK reserves, partnerships, exchange balances, and ETF
Chainlink’s other key catalysts that will drive its performance higher in the longer term. First, Nansen data shows that the amount of LINK tokens on exchanges has been in a strong downward trend, a sign that investors are not selling. These reserves have plunged to 270 million, down from 277 million last month.
Further, the amount of tokens on its recently launched reserves is rising. Data shows that there are now 237,014 tokens on LINK Reserves worth $5.3 million.
This marks a significant milestone for a program launched in August, in which Chainlink is allocating tokens from its on-chain and off-chain fees.
Chainlink will likely rebound due to ongoing partnerships with major institutions. The U.S. Department of Commerce, for example, is collaborating with Chainlink to bring macroeconomic data onchain from the Bureau of Economic Analysis.
Other major partnerships are with companies like Swift and JPMorgan. Most recently, it partnered with Aave (AAVE) following the launch of Horizon, its RWA platform. Chainlink price will also jump as hopes that the U.S. Securities and Exchange Commission will approve the recently filed Bitwise LINK ETF.
