Chainlink (LINK) has recently experienced a notable revival, climbing above the $20 level with the strength from its $18 support. The altcoin’s price recovery was accompanied by a significant increase in trading volume and a steady rise in network activity. The recent price recovery was particularly triggered by breaking through the resistance of the neckline of the cup and handle formation.
Chainlink’s Rise Under the Influence of the Cup and Handle Formation
At the end of January, the price of Chainlink’s LINK jumped from $13.50, entering a recovery phase. This positive momentum resulted in a 46.7% increase in LINK’s price within three weeks, surpassing the $20 level for the first time in two years. Analysis of higher time frame charts indicates that this uptrend is the result of a successful breakout of the $17.5 neckline resistance of the cup and handle formation, a long-term bullish formation often interpreted as a sign that a downtrend has bottomed out and offers investors a new entry point.
Intotheblock’s content partner EkponoAkwaowo also highlighted LINK’s price increase of 11%, surpassing the $20 threshold and reaching a 22-month high. This price increase parallels a notable rise in network activity, characterized by an increase in active wallet addresses and the creation of new ones.
In particular, large whale transactions indicate a strong interest in LINK by major investors. If this trend continues, LINK’s price could potentially increase by another 50%, reaching a $30 target. However, if it fails to sustain above the $20.81 level, the altcoin’s price could retract to around $17-$18.
Nevertheless, the continuation of this upward price movement in LINK will continue to depend on the price action of the largest cryptocurrency, Bitcoin (BTC). Sharp declines and rises in Bitcoin could also be expected to affect LINK’s price.
What Do Technical Indicators Say for LINK?
For LINK, the upward orientation of the Bollinger Bands (BB) indicator shows that buyers currently dominate the asset. Moreover, the extremely high level of the Average Directional Index (ADX) indicator suggests that there should be readiness for a minor pullback to temper the excessive upward momentum in LINK, indicating a potential temporary retracement amidst the overall uptrend.
