Both technical and on-chain indexes are signaling that Chainlink may soon resume its uptrend.


Key Takeaways

  • The decentralized oracles token has been consolidating within a narrow trading range for over the past month.
  • Throughout this time, bullish momentum has been quietly building up.
  • An increase in the buying pressure behind LINK may see it rise towards early-March highs of $5.

Share this article

With another Bitcoin halving written in the history books, investors have grown overwhelmingly optimistic about what the future of crypto has to offer. And, different altcoins, including Chainlink, appear to be on the cusp of a major bullish breakout.

Chainlink Consolidates Within a No-Trade Zone

The decentralized oracle token has been consolidating within a narrow trading range over the past month.

This stagnation phase between $3.6 and $4 led the Bollinger bands to squeeze on LINK’s 1-day.

Squeezes are indicative of periods of low volatility and are typically followed by wild price movements. The longer the squeeze, the higher the probability of a strong breakout.

This technical index does not necessarily indicate whether Chainlink will move up or down. As a result, the area between the lower and upper band is a reasonable no-trade zone.

A candlestick close below or above this area will help determine the direction of the trend.

LINK/USD on TradingView

Based on the Fibonacci retracement indicator, the no-trade zone is defined by the 38.2% and 23.6% levels. These support and resistance levels sit at $3.7 and $4.2, respectively.

A spike in the selling pressure behind Chainlink that allows it to move past support may see the altcoin fall towards the 50% or the 61.8% Fib. Conversely, if the demand picks up, LINK could be poised to test early March’s swing high of $5.

Chainlink US dollar price chart
LINK/USD on TradingView

Technical Indexes Scream Buy

Despite the ambiguity mentioned above, several technical indexes estimate a higher probability that LINK will breakout in an upward direction.

For instance, a golden cross formed within LINK’s daily chart.

This technical pattern developed the moment the 50-day moving average moved above the 100-day moving average. Some of the most prominent technical analysts in the industry see this pattern as one of the most definitive buy signals that could start a bull market.

The last time these moving averages formed a golden cross on Chainlink’s 1-day chart was in late October 2019 and early February 2020. Following these bullish formations, LINK surged by 25% and 60%, respectively.

Now, a similar scenario could take place.

Chainlink US dollar price chart
LINK/USD on TradingView

In addition to the golden cross, the moving average convergence divergence, or MACD, adds credence to the optimistic outlook.

This technical indicator, which follows the path of a trend and calculates its momentum, appears to be turning bullish within the same time frame for the first time since late March.

As the 12-day exponential moving average moved above the 26-day exponential moving average, the odds for a bullish impulse increased significantly.

Chainlink US dollar price chart
LINK/USD on TradingView

Finally, the price action seen over the last few hours allowed the parabolic stop and reverse, or “SAR,” to have a bullish flip over.

Every time the stop and reversal points move below the price of an asset, it is considered to be a positive sign. But, when the SAR points move above the price, it can be viewed as a bearish signal.

By taking in aggregate the golden cross, the MACD, and the stop and reversal system, it is reasonable to assume that Chainlink’s uptrend is about to resume.

Chainlink US dollar price chart
LINK/USD on TradingView

On-Chain Metrics Support the Bullish Outlook

With so many technical indexes screaming buy, many holders of at least one million LINK, colloquially known as whales by crypto traders, have been increasing rapidly over the past week.

Earn smarter with Cred
Simetri Ad

Data from Santiment shows that the number of addresses holding between 1 million to 10 million LINK surged by more than 7%.

The sudden increase in LINK whales could suggest that something big is brewing behind closed doors.

Chainlink's Holders Distribution by Santiment
Chainlink’s Holders Distribution by Santiment

If this is the case, IntoTheBlock’s “In/Out of the Money Around Price” (IOMAP) model shows that token still needs slice through the 2,150 addresses that bought over 1.2 million LINK at an average price of $4.2 before moving to the next primary supply wall.

This limit sits at $4.40.

Here, roughly 2,300 addresses purchased 2.75 million LINK. Breaking through this barrier may see LINK rise to $5 or even higher since there are few barriers beyond the $4.33 to $4.45 level.

In/Out of the Money Around Price by IntoTheBlock
In/Out of the Money Around Price by IntoTheBlock

The Crypto Market Moving Forward

The recent Bitcoin halving has been a catalyst for renewed interest in the cryptocurrency market.

Alistair Milne, co-founder and CIO of Altana Digital Currency Fund, affirmed that Google searches for the keyword “bitcoin halving” skyrocketed by 9x compared to the last block rewards reduction event in 2016.

This trend is declining now that the halving took place, but full-time crypto trader Philip Swift said that Blockchain-related searches on Chinese messaging app WeChat continue rising steadily.

With so much interest in the industry, one could argue that the market is bound for a steep correction. However, Glassnode’s Puell Multiple index shows that Bitcoin is still undervalued even after the massive gains posted after March’s Black Thursday.

Historically, bear markets tend to end when the Puell Multiple drops below 0.50, which is precisely what is currently happening.

Bitcoin's Puell Multiple by Glassnode
Bitcoin’s Puell Multiple by Glassnode

Even though these data sets refer to the flagship cryptocurrency, the high level of correlation in the market suggests that if Bitcoin goes up, the rest of the market, including Chainlink, will follow.

Share this article

347 COMMENTS

  1. I am really impressed along with your writing abilities as well as with the structure to your weblog.
    Is that this a paid theme or did you modify it your self? Anyway stay up the nice quality
    writing, it is rare to look a great blog like this one
    nowadays..

  2. I will immediately take hold of your rss feed as I can not to find your
    email subscription hyperlink or newsletter service. Do you have any?

    Kindly permit me recognise so that I could subscribe.
    Thanks.

  3. Greetings! Very helpful advice within this post! It is the little changes that will
    make the most important changes. Many thanks for sharing!

  4. I am sure this post has touched all the internet people, its really really good post on building up new blog.

  5. Very good info. Lucky me I ran across your website by chance (stumbleupon). I have saved as a favorite for later!|

  6. Thanks in support of sharing such a nice thought, article is fastidious, thats why i have read it fully|

  7. Hello my family member! I wish to say that this article is awesome, great written and include approximately all vital infos. I would like to peer extra posts like this .|

  8. What’s up it’s me, I am also visiting this web site regularly, this website is really fastidious and the users are in fact sharing pleasant thoughts.|

  9. You actually make it seem really easy with your presentation but I to find this topic to be really one thing that I think I might by no means understand. It kind of feels too complex and extremely large for me. I am having a look forward on your subsequent put up, I will try to get the hang of it!|

  10. We’re a group of volunteers and starting a brand new scheme in our community. Your website offered us with valuable info to work on. You have done an impressive task and our entire community shall be grateful to you.|

  11. Hello there! This post couldn’t be written any better!
    Looking at this article reminds me of my previous roommate!

    He constantly kept preaching about this. I’ll send this information to him.
    Fairly certain he’s going to have a good read.
    Thanks for sharing!

  12. I have observed that in the world these days, video games will be the latest popularity with kids of all ages. Many times it may be out of the question to drag your kids away from the video games. If you want the very best of both worlds, there are several educational activities for kids. Interesting post.

  13. I have been browsing online more than three hours today,
    yet I never found any interesting article like yours.
    It is pretty worth enough for me. In my opinion, if all web owners and bloggers made good content as you
    did, the web will be a lot more useful than ever before.

  14. I’ve been surfing online more than 2 hours today,
    yet I never found any interesting article like yours. It’s pretty worth enough for me.
    In my view, if all website owners and bloggers made good content as you did, the web will be a
    lot more useful than ever before.

  15. I was recommended this blog by my cousin. I am not sure whether this post is written by him as no one else know such detailed about my trouble. You are amazing! Thanks!|

  16. Hello! I simply would like to give you a huge thumbs up for the great info you have right here on this post. I will be coming back to your site for more soon.|

  17. Hi mates, pleasant post and pleasant arguments commented at this place, I am genuinely enjoying by these.|

  18. You have made some decent points there. I checked on the
    internet to find out more about the issue and found most individuals will go along with your views on this web site.

  19. Good post. I learn something new and challenging on websites I stumbleupon every day. It’s always helpful to read content from other authors and use a little something from other sites. |

  20. An additional issue is really that video gaming became one of the all-time greatest forms of fun for people of various age groups. Kids engage in video games, and also adults do, too. Your XBox 360 is among the favorite games systems for people who love to have a huge variety of games available to them, and who like to experiment with live with other people all over the world. Many thanks for sharing your opinions.

  21. Woah! I’m really enjoying the template/theme of
    this site. It’s simple, yet effective. A lot of times it’s very
    difficult to get that “perfect balance” between user friendliness and visual appearance.
    I must say you have done a superb job with this. In addition, the blog loads super fast for me on Internet explorer.
    Superb Blog!

  22. Hey there, You have done an incredible job. I’ll certainly digg it and in my view recommend to my friends. I’m confident they will be benefited from this web site.|

LEAVE A REPLY

Please enter your comment!
Please enter your name here