Good to see you again, trader. Today we have a look at Chainlink ($LINK). As it has continued its upward momentum for the third straight day, hitting a five-week peak at $16.3 on May 16. Let’s study the recent events and dive into the chart.

Rise up $LINK

The $LINK token has climbed over 28% in the last three days, rising from below $12.8.

This impressive performance follows the successful completion of tests with DTCC and major US banking institutions, indicating a promising future for Chainlink. These tests involved companies like American Trust Custody, Edward Jones, and JPMorgan, focusing on accelerating the tokenization of assets. The collaboration also includes significant players such as Franklin Templeton and BNY Mellon, paving the way for substantial advancements.

Following these tests, Chainlink’s Cross-Chain Interoperability Protocol (CCIP) can now serve as a connecting layer across various blockchains, enhancing integration with DTCC both now and in the future.

Co-founder Sergey Nazarov emphasized the importance of these developments, stating that key market participants are addressing real-world challenges by integrating blockchains, smart contracts, and Oracle networks.

According to market intelligence firm Santiment, the recent surge in Chainlink’s price is supported by robust LINK whale activity, setting it apart from the wider cryptocurrency market.

Santiment shared a chart on May 17 via the X social media platform showing that the number of LINK whales—addresses holding 100,000 LINK or more—has increased to 564, a 4.6% rise in just five weeks.

The Santiment firm notes that if social dominance remains consistent and FOMO does not take over, bullish conditions could be on the horizon for Chainlink.

The firm stated,

“Chainlink is experiencing a breakout ahead of the markets, with whales accumulating and social dominance rising.”

Chainlink Price Analysis: Crucial Levels to Monitor

The LINK price pulled back from a 26-month high of $22.87 on March 11, dropping over 47% to hit a swing low of $15.46 on April 13. Pretty much a good ol’ crypto dump fest.

Recently, the Chainlink price has shown a bullish trend in three consecutive sessions on the daily chart. With the $17.0 supply zone acting as immediate resistance. Bulls are now aiming to turn this level into support. Key levels to watch on the upside are the 50% Fibonacci retracement level at $17.42. Plus subsequently, $18.7, which aligns with the 81.8% retracement level.

Breaking through this level could open the path toward the 78.6% retracement level and potentially higher. Which would be completing the retracement at $22, which would be a 40% increase from the current price.

All the major moving averages are trailing the price, and the relative strength index (RSI) at 64, close to the overbought region, confirms the buyers’ dominance in the market.

Conversely, the near-overbought RSI suggests that the LINK price might soon face downward pressure due to buyer exhaustion and profit-taking.

The first critical support level on the downside is the $16 to $15 demand zone, where the 50-day EMA, the 100-day EMA, and the 200-day EMA are positioned.

Additional support levels include the 23.6% Fibonacci retracement level at $14.54 and the psychological level at $12. Further lines of defense could emerge from the psychological level and the swing low at $12.

This area might represent the near-term bottom for Chainlink.

Final Thoughts

In conclusion, Chainlink’s recent surge highlights its growing importance and potential in the blockchain ecosystem. The successful tests with major financial institutions and the increased activity among $LINK whales signal strong confidence in its future prospects. As Chainlink continues to innovate and expand its Cross-Chain Interoperability Protocol, it is well-positioned to drive further advancements in the tokenization of assets and blockchain integration. Investors and market participants should keep an eye on Chainlink as it navigates this exciting phase of growth and development.

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You might also like our other trading blogs, like our recent one about Alt Season 2024.

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