In recent months, the altcoin market has seen remarkable volatility; however, there are indications of a recovery in the altcoin space at present.
Chainlink [LINK] has been responding positively to this recovery, showing modest gains. As of the current moment, LINK is trading at $10.23 following a 4.24% increase in the last 24 hours.
Previously, LINK was on a downward trend, forming a falling wedge pattern after reaching $12.6 in August and dropping to $9.2.
Despite the recent uptick, LINK is still significantly below the July high of $15 and remains down by around 80.6% from its all-time high of $50.88.
The recent gains have sparked speculation on whether LINK is set for further growth or if it’s just a temporary market correction. Renowned crypto analyst Cryptojack has suggested that LINK is poised to see a fourfold increase.
Current Market Sentiment
According to Jack’s analysis, LINK needs to meet two key conditions to reach $22. He emphasized that LINK’s falling wedge pattern must maintain support above $6.
He noted that the falling wedge is nearing this crucial level, and a breach could lead to further decline.
Additionally, Jack argued that LINK must break out of the falling wedge to establish a robust uptrend. He believes that a breakout from this pattern would empower LINK to quadruple in value and hit $22.
A breakout from the falling wedge has historically led to substantial gains for LINK. Previously, the token surged from $8.0 to $12.6 after breaking out of a similar pattern.
Analysis of LINK Charts
Indeed, Jack’s outlined conditions paint a bullish picture. But what do other market indicators convey?
The Market Value to Realized Value (MVRV) Ratio for Chainlink has recently turned positive after being negative for some time. This switch signifies an uptick in market value surpassing realized value.
The positive shift in the MVRV ratio indicates market recovery and a shift towards bullish sentiment. It reflects increased demand and optimism in the market.
Moreover, LINK’s open interest per exchange has seen an uptick in the past week. The rising open interest, now at $40 million from a low of $36 million, signifies increased investor confidence in potential price growth.
This surge in open interest is a positive sign as investors are opening new positions with a premium, anticipating upward movement and safeguarding against potential downturns.
If LINK maintains levels between $10 and $12 and closes the daily candle above $10.5, it could aim for the $15 resistance level in the near term.