The Chainlink price has pulled back in the past few months even after the network’s ecosystem continued to do well. LINK dropped to a low of $13 on Tuesday, down from the year-to-date high of $30. This article explains why the LINK price may stage a strong comeback in the long term.
Chainlink price has formed a bullish pattern
The first main reason why the LINK price will soon stage a strong comeback is that it has formed a rare bullish chart pattern on the weekly chart.
The chart below shows that the coin bottomed around $12. This was a notable level since it was along the ascending trendline that connects the lowest swings since June 12 of 2023. It has always bounced back whenever it dropped to this level.
The Chainlink price has formed an ascending broadening wedge pattern, also known as a megaphone. It is known as a megaphone because of its resemblance. Historically, this pattern usually triggers a strong bullish breakout.
Therefore, it is likely to rebound as bulls target the upper side of this wedge at about $30, which is about 125% above the current level. This rebound will happen as long as the coin remains above the lower side of the megaphone pattern.
A break below the lower side of the wedge will raise the probability of the LINK price falling to the psychological point at $10.
The caveat of this Chainlink price prediction is that it is based on the weekly chart. Historically, signals generated on this chart often take time to happen since each candlestick represents a week. For example, it has taken months for the coin to drop from the upper side of the megaphone to the lower side.
LINK has some solid fundamentals
Chainlink price will likely do well because of its solid fundamentals in the crypto industry, where it is the biggest oracle network. An oracle is a technology that helps to connect offchain data to the on-chain. It is widely used in the decentralized and centralized finance industries, providing price feeds and other services.
Chainlink has also become a key player in the Real World Asset (RWA) tokenization industry. This crucial technology aims to tokenize real assets like real estate, art, and classic vehicles.
Chainlink does that by using cross-chain interoperability protocol (CCIP). CCIP technology facilitates communication between chains like Base, Arbitrum, Ethereum, and Solana. It has been adopted by some of the biggest companies in the finance industry like Blackrock, JPMorgan and SWIFT.
SWIFT is notable in that it handles over $150 trillion in volume each year. It is aiming to use tokenization to boost speeds and cut costs of these transactions.
Chainlink has also taken measures to boost its network. For example, the developers launched the Chainlink Payment Abstraction to the mainnet.
This feature enables customers using the Chainlink technology to pay using other cryptocurrencies, which will then be converted into LINK. It will help to grow the network by reducing friction and reducing MEV.
There are also odds that the Chainlink will get a spot LINK ETF this year. A LINK fund will be useful in creating demand from United States investors.
From a macro level, the coin will likely bounce back when the Federal Reserve slashes interest rates in response to Donald Trump’s trade war. This trade war has led many companies like PIMCO and Goldman Sachs to boost their recession odds.
The post Chainlink price prediction: giant megaphone pattern forms appeared first on Invezz