On September 6, as the LINK token rises by 8.25%, Chainlink emerges as one of the best crypto assets of the day.
The LINK / USD pair reached $ 36.35 for the first time since May 20, months after hitting a low of $ 13.45, recovering more than 170% overall. At the same time, the recent rise brings the price up 36% from the beginning of the month.
Growth of the ecosystem
On September 1st, Optimism Ethereum has announced to have integrated Chainlink’s decentralized oracle solutions into Ethereum’s Layer-2s. As a result, LINK, which serves as a payment and staking token within the Chainlink ecosystem, has increased by 36% on speculation of increased demand from Chainlink users.
Previously, the same fundamentals helped investors close 2020 with a 540% profit.
A decentralized finance (DeFi) booming and its reliance on Chainlink to secure real-time data feeds have pushed demand for the token up. As a result, Chainlink’s market share in DeFi reached 80% at one point, reports ZDNet.
LINK continued its climb in the first quarter of 2021, with an increase of 161%, but the second quarter recorded a disappointing -37%. The correction is evidently related to the negative general trend triggered by the main cryptocurrencies, including Bitcoin (BTC) ed Ether (ETH).
Yuriy Mazur, head of data analytics at cryptocurrency exchange CEX.IO, says LINK could exceed $ 50 in the next three weeks. The analyst cited Chainlink’s partnership with over 76 new projects in August as one of the main bullish indicators.
He told Cointelegraph:
“This situation has spurred the accumulation of LINK to access the system’s services. As a result, spot traders seem willing to bring the price back to its previous all-time high of $ 52.”
But for Stephen Tuttle, financial analyst at Seeking Alpha, the next big target for LINK is $ 65.
Tuttle has highlighted how traders have turned their full attention to Ethereum, as the main network for non-fungible tokens (NFT). He therefore predicted a reallocation of capital after the recent rise in ETH, a potentially advantageous move for the LINK market:
“If LINK can reach the value of 0.02 ETH once again, that would put the token at around $ 65 at the current price of Ethereum, which is a 2.6x increase from the current value of $ 25.”
At the time of writing, the LINK / ETH pair records 0.0088 ETH.
Allerta broadening wedge!
LINK’s latest rally also emerged in the wake of a general boom in cryptocurrencies, with Bitcoin recovering $ 51,000 and Ether $ 4,000. Cryptocurrency traders increased their positions across the board, expecting the Federal Reserve to delay its reduction plans after two disappointing relationships on employment in the United States last week.
As a result, LINK remains highly correlated with major cryptocurrencies. On top of that, it appears that the token is forming a bearish reversal indicator, as highlighted in the chart below.
Referred to as the “ascending broadening wedge”, the indicator shows two rising trendlines that deviate from each other. The pattern does not guarantee that the buy will run out, but it indicates the bears’ intention to sell whenever the price hits the upper trendline.
Consequentially, LINK / USD is likely to experience a large pullback towards the lower trendline of the wedge (at around $ 28). However, the bears would face several supports, including $ 37.96, the 50% Fibonacci retracement level obtained from the swing high of $ 52.32 and the swing low of $ 13.61.
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