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Key Insights:
- Chainlink price dropped to a crucial support level on Thursday this week.
- This pullback is part of a break-and-retest chart pattern.
- The LINK token price has formed a golden cross pattern on the daily chart.
Chainlink price crashed today, July 24, and retested a crucial support level as the crypto market retreated. This retreat could be a harbinger for the next rebound, potentially to $30 as its role in the crypto and financial industry grows.
Chainlink Price Analysis After Retesting Key Support
LINK price pulled back as Bitcoin and most altcoins retreated after their recent surge. It dropped and retested the important support level at $17.93, the highest swing on May 12.
This support was notable because it coincided with the neckline of the giant double-bottom pattern at $10.9. A double bottom is a popular bullish reversal pattern, as it signals that bears are hesitant to short below that price.
By falling back to its neckline at $17.93, Chainlink price has formed a break-and-retest pattern. It normally confirms a breakout and continuation.
Another bullish catalyst for the LINK token price is that it is about to form a highly bullish golden cross pattern. This bullish continuation pattern forms when the 50-day Exponential Moving Average (EMA) moves above the 200-day one.
The golden cross typically indicates that short-term momentum is strengthening. Historically, the Chainlink price has surged after forming this cross.
For example, it formed this pattern in November 2024 when it was trading at $14. After that, the token jumped by 115% and reached a high of $30 within weeks. Therefore, a combination of a double-bottom, a break-and-retest, and a golden cross points to more gains in the coming months.
One approach to identify the target price is to measure the double-bottom pattern’s height. In this case, this height is about 34%. Measuring the same distance from the neckline gives the most likely target price at $24.
A move above that level will point to more gains, potentially to the resistance at $30, which is about 71% above the current level. On the flip side, a drop below the double-bottom point at $10.9 will invalidate the bullish Chainlink price forecast.
Fundamentals Support of a Chainlink Price Surge
In addition to its strong technicals, Chainlink price has solid fundamentals that will help it bounce back, potentially in the coming weeks or months.
First, third-party data shows that whales have continued to accumulate the LINK token this month. It is a sign that they expect the bull run to continue. Whale holdings have jumped by 27% in the last 30 days to 4.19 million tokens. These investors held about 3.3 million tokens on June 24.
Second, investors are moving their LINK tokens from centralized exchanges to their wallets. Exchanges now hold over 276 million coins, down by over 3% in the last 30 days. In most cases, tokens flood exchanges when investors are selling as they expect the price to drop.
Third, the futures market points to resilient Chainlink demand among investors. The futures open interest has been on a relentless bull run in the past few months. It moved from a low of $420 million in March to a high of $1 billion this week.
Soaring open interest is a sign of robust demand and liquidity for a token.
Most importantly, the role of Chainlink is expected to keep growing as the Real-World Asset (RWA) tokenization trend grows. As the biggest oracle in the industry, it will be selected by the biggest players in the RWA industry. Some companies using or testing it for RWA are Swift, JPMorgan, Euroclear, and BNY Mellon.
Data shows that Chainlink has extended its market share in the oracle space. Its total value secured (TVS) has jumped to over $54 billion, giving it a market dominance of 62%.
Summary
Chainlink price has been in a strong bullish trend in the past few weeks, helped by the robust crypto market bull run and altcoin season hopes. While this rally has stalled of late, its strong technicals and fundamentals point to an eventual rebound, potentially to $30 soon.
Disclaimer
This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.
