Chainlink (LINK) rebounds toward multi-month high — What’s behind the move?

The NFT Unicorn e8e514b1-42d5-4369-8cf3-aa3864130779 Chainlink (LINK) rebounds toward multi-month high — What’s behind the move? Crypto News

Chainlink’s LINK (LINK) token experienced a 7% surge on Jan. 17 to trade at $16, a level last seen on Dec. 29, 2023. This solidified its position as the 11th largest cryptocurrency (excluding stablecoins) by market capitalization.

It is worth noting that as LINK gains value, Bitcoin’s (BTC) price trades 2% down over the same period. LINK’s performance also stands out compared with Ether’s (ETH) 0.65% decrease and SOL’s (SOL) 5.5% increase.

A quick flip through the news and Chainlink’s roadmap shows that the project’s oracle and decentralized computing solutions are driven by expectations of real-world asset (RWA) tokenization and signs of institutional adoption.

However, can LINK sustain the current rally? Let’s find out.

Chainlink partnerships and collaborations back LINK’s upside

Several recent developments have contributed to LINK’s outperformance of its peers. Notably, the announcement of Chainlink Lab’s partnerships with SingularityDAO, a decentralized platform and Swift have supported its presence in the RWA sector for months, contributing to its bullishness.

Moreover, Redacted’s recent integration of Chainlink CCIP for cross-chain transfers of Pirex ETH (pxETH) further underscores Chainlink’s growing influence in the Web3 space. The integration aims to make pxETH accessible across various blockchains for cross-chain interoperability.

LINK’s decreasing supply on exchanges

More clues that could explain Chainlink’s recent upside come from data tracking LINK supply across crypto exchanges (the yellow wave in the Santiment chart below).

Notably, LINK’s supply on exchanges hit a four-year low, below 15%. A diminishing supply across exchanges hints at traders’ preference for holding LINK tokens over selling them for other assets. So, LINK’s potential to continue its ongoing run increases if demand doesn’t diminish.

LINK supply across all crypto exchanges vs. total holders. Source: Santiment

This coincides with a 6% increase in the number of wallets holding more than 0 LINK “nearing its all-time high once again, sitting at 713,560,” says crypto data intelligence Santiment in a Jan. 15 post on X.

Simply put, Chainlink’s smallholders could believe its value will rise further in the near future.

Related: 3 reasons why Chainlink price can rally another 20% by New Year’s

LINK price aims for a V-shaped recovery

LINK’s price action since Dec. 27, 2023, has formed a V-shaped recovery chart pattern on the daily chart.

A V-shaped recovery is a bullish pattern formed when an asset experiences a sharp price increase after a steep decline. It is completed when the price moves up to the resistance at the top of the V formation.

LINK appears to be on a similar trajectory as it currently trades close to the pattern’s resistance line at $17.

The NFT Unicorn 85dbc703-2723-4263-98ed-f515b922fcf8 Chainlink (LINK) rebounds toward multi-month high — What’s behind the move? Crypto News
LINK/USD daily chart. Source: TradingView

The rising moving averages and the positive moving average convergence divergence (MACD) indicator also provide insight into the bullish momentum building in the LINK price.

Note that the bullish cross sent by the MACD on Jan. 14 when the 12-day exponential moving average (EMA) (blue line) crossed above the 26-day EMA (orange line) was still in play suggesting that the market conditions continue to favor the upside.

Chainlink’s LINK (LINK) token experienced a 7% surge on Jan. 17 to trade at $16, a level last seen on Dec. 29, 2023. This solidified its position as the 11th largest cryptocurrency (excluding stablecoins) by market capitalization.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.



Source: Cointelegraph