Chainlink price rose for three consecutive weeks and is slowly nearing the key resistance at $31 as it ecosystem growth and demand accelerate. LINK token was trading at $25 today, up by 135% from its lowest level in July. This article conducts a technical analysis and explains the key level to watch.
Chainlink price technical analysis
The daily chart shows that the LINK price has been steady in the past few weeks. This surge happened after it formed the highly bullish double-bottom pattern at $10.93, its lowest level in June and April this year.
Chainlink has now moved above the neckline at $18, its highest point in May this year. This means that the double-bottom pattern has a depth of $8, meaning that it has already reached the target level of $25.
LINK price remains above the 50-day and 100-day Exponential Moving Averages (EMA), which have provided it with robust support.
Most importantly, there are signs that the Chainlink price has moved into the third phase of the Elliot Wave pattern. The first one happened from June 22 to July 21, while the second one was between July 21 and August 2.
It is now in the third wave, which is usually the longest and the most bullish. If this happens, the next key level to watch will be at $31, up by 20% above the current level. A drop below the support at $20 will invalidate the bullish LINK price forecast.
The bullish case for LINK price
There are a few reasons to be bullish on the Chainlink price. First, the developers recently launched the Strategic LINK Reserve that will accumulate the token using its on-chain and off-chain revenue in perpetuity.
This is an important development that will lead to sustained LINK demand over time. Data shows that the reserves now hold 109,664 LINK token, currently worth $2.8 million, a trend that will continue.
Second, Chainlink is at the forefront of the major shifts occurring in the financial services industry. For example, Chainlink is the biggest player in the decentralized finance (DeFi), where it has a total value secured (TVS) of over $90 billion. It provides oracle services to some of the biggest players in the space.
Chainlink is also building solutions for the Real-World Asset (RWA) industry, which Standard Chartered believes will be valued at over $30 trillion by 2034. It does that by offering the Cross-Chain Interoperability Protocol (CCIP), which is now used by tens of major companies.
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Third, one or more companies may file for a spot LINK ETF because it is one of the most popular tokens in the crypto industry. As such, a Chainlink ETF would have demand from institutional and retail investors. A good example of this is the Grayscale LINK Trust, which has accumulated over $32 million in assets.
Further, Chainlink continues to have robust adoption, including recently by companies like Xitadel, Bitget, Pendle, and TerpLayer.
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