After experiencing a period of price surges, Chainlink [LINK] appeared to have entered a phase of consolidation in the past week. However, the token recently broke out of a long-established pattern, indicating renewed bullish momentum.
While the upcoming days may seem relatively quiet, a market-wide push could propel LINK to reach new all-time highs.
Evaluating Chainlink’s Future Trajectory
Upon conducting an analysis of LINK’s daily chart, CryptoCrypto identified a significant development. In 2021, a bullish symmetrical triangle pattern emerged on LINK’s chart, within which the token’s price has been consolidating. Recently, the price broke out of this pattern, albeit with a decrease in upward momentum.
This breakout might signify the beginning of a new phase for LINK, potentially leading to the formation of a bullish flag pattern. Should this materialize alongside favorable market conditions, LINK could retest its all-time high and surge towards $50 in the foreseeable future.
If a breakout above the bullish flag occurs during a period of heightened altcoin activity, it could trigger a substantial rally. Recent data has suggested that the altcoin season might commence sooner than initially anticipated.
Recent reports from CryptoCrypto indicated a decline in BTC’s dominance below a critical level, coinciding with a significant rise in the altcoin season index. These indicators point towards a potential period of outperformance for altcoins starting as early as December.
Short-Term Expectations for Chainlink
While the anticipation of LINK reaching $50 represents a longer-term forecast, CryptoCrypto delved into current metrics to assess short-term projections.
One notable observation was a sharp rise in LINK’s exchange balance, signaling an increase in selling pressure and hinting at a forthcoming price correction.
Furthermore, the NVT ratio for LINK spiked, typically indicating overvaluation of the asset and suggesting a possible pullback. However, it is essential for investors to remember that such corrections often precede the formation of bullish flag patterns.
Despite the metrics pointing towards a potential price decline, LINK’s realized loss has notably decreased. This trend can be attributed to the token’s previous price surges, leading to more investors realizing profits.
Additionally, a review of the token’s daily chart revealed crucial short-term support and resistance levels. Currently, Chainlink is testing support at $18.66, and a successful test at this level could fuel an upward movement in the days ahead.