Over the past two weeks, the Chainlink (LINK) price has undergone a sharp pullback, dropping approximately 20% from its yearly high and entering a temporary bear phase. Despite this recent decline, multiple technical and fundamental factors suggest that LINK may be poised for a strong bullish breakout.
Key Highlights
- Chainlink has formed a cup-and-handle pattern on the charts.
- LINK reserves are steadily increasing.
- Anticipated approval of the Bitwise LINK ETF could serve as a major catalyst.
Chainlink Price Exhibits a Cup-and-Handle Pattern
Technical analysis indicates that Chainlink could see notable gains in the coming weeks. The token has consistently held above the 50-day exponential moving average (EMA), a key indicator that the overall bullish trend remains intact despite recent downward pressure.
LINK has also found strong support at the pivot-reversal level indicated by the Murrey Math Lines tool, a level often associated with price rebounds in cryptocurrency markets. Additionally, LINK continues to trade above the Ichimoku cloud, further reinforcing positive market sentiment.
The recent price correction fits within a developing cup-and-handle pattern, with the upper boundary at $27.17 and the lower boundary at $10.15. If this pattern plays out, the potential upside target could reach $44, representing nearly a 100% gain from current prices. However, a decline below the critical support at $18 would invalidate this bullish outlook.
LINK Reserves, Strategic Partnerships, Exchange Balances, and ETF Outlook
Several fundamental developments also support the possibility of a Chainlink price rally. Data from Nansen reveals that LINK tokens held on exchanges have been steadily falling, suggesting that investors are increasingly holding their assets rather than selling. Exchange reserves have dropped to 270 million LINK from 277 million last month.
Meanwhile, LINK reserves established recently are on the rise. Presently, 237,014 tokens worth approximately $5.3 million are stored in these reserves—a noteworthy milestone for the program launched in August, which allocates tokens derived from both on-chain and off-chain fees.
Chainlink’s growing network of partnerships further strengthens its long-term prospects. Key collaborations include the U.S. Department of Commerce, which is working to bring macroeconomic data from the Bureau of Economic Analysis on-chain. Additional strategic partners include Swift, JPMorgan, and Aave, following the introduction of Chainlink’s Horizon RWA platform.
Finally, investor optimism regarding the potential approval of the Bitwise LINK ETF by the U.S. Securities and Exchange Commission (SEC) could act as a significant catalyst, likely boosting demand and supporting further price appreciation.
