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- A top market analyst is very bullish on the prospect of Chainlink.
- Chainlink’s growth forecast hinges on many factors, including growing CCIP adoption.
Popular crypto analyst Cryptojack says the decentralized Oracle platform Chainlink (LINK) is on track to reach the $22 mark. The analyst’s prediction follows the recent recovery in the altcoin market, with LINK trading in the $10 price range.
Before this, LINK was on a steep downhill spiral, as highlighted in our earlier report. The altcoin quickly formed a falling wedge pattern after hitting $12.6 in August. From this level, LINK dropped to as low as $9.2.
Analyst Bullish Prediction on Chainlink
In an X post, Cryptojack says LINK is prepared to make almost four times its present gains as it targets $22. The analyst identified two conditions for LINK to achieve this target: first, LINK’s falling wedge must remain above the $6 resistance support area. From his analysis, LINK’s price amid the falling wedge is approaching this critical level, and a continuous breach downside may result in a price decline.
While respecting the falling wedge formation, $LINK is approaching a BIG support area at $6.
If #Chalinking bounces from that area while breaking the wedge to the upside, I will Long it on @Phemex 👉 https://t.co/dQy5LUChJS with a target of $22 for almost a 4x. pic.twitter.com/vxnm9661Sn
— CryptoJack (@cryptojack) September 7, 2024
For context, the falling wedge pattern is a reversal formation in technical analysis, featuring two converging trendlines sloping downward. This pattern usually signals a price range contraction and decreasing volatility. The pattern is complete with a breakout above the upper trendline, often with increased volume.
The second condition cited by Cryptojack is that LINK has to break from the falling wedge to prepare for a robust uptrend. According to him, a breakout from this pattern will result in more gains for the altcoin. To support his argument, he included a chart showing price gains for LINK every time it broke from the falling wedge. For example, In one of the previous trends, LINK rose from a local low of $8.0 to a local high of $12.6.
As of this writing, LINK is trading at $10.66, representing a 3.9% increase in the past 24 hours. The trading volume also increased by 24% within the same timeframe to $187 million, with the market cap at $6.5 billion.
Will LINK See Major Gains?
Chainlink’s current market position and the conditions highlighted by Cryptojack undoubtedly provide a positive outlook for LINK. However, other market indicators must be considered to determine whether the altcoin will see further price gains.
Firstly, Chainlink’s Market Value to Realized Value (MVRV) ratio has turned positive after a prolonged period of negative value. The MVRV ratio turned positive to 0.29 at press time, suggesting a recovery phase or bullish sentiment. Also, an MVRV ratio shift from negative to positive indicates increased demand and optimism.
In addition, LINK’s Open Interest on exchanges has grown in the last week, increasing from a $36 million low to $40 million. The rise in Open Interest per exchange indicates that more traders are betting on further price gains.
As Chainlink looks towards the future, its consistent partnership with reputable market players could also help boost its price. As our earlier post noted, Sonic Labs partnered with Chainlink to integrate the protocol’s Data Feed and CCIP into the Sonic Network.
