Chainlink chips bear trend with a 50% bullish wedge breakout—what lies ahead?

Chainlink, Chainlink chips bear trend with a 50% bullish wedge breakout—what lies ahead?
Image by Gerd Altmann from Pixabay 
  • Chainlink technicals behind the rally. Is further 50% gain possible?
  • Recovery wave behind LINK’s success.

Yerevan (CoinChapter.com) – Chainlink’s native token LINK traded at $19.1 ahead of the US session Monday, after a 29 percent advance during the past week. The digital asset eyes a possible 50 percent further gain in the upcoming sessions. The optimistic prognosis is based not only on the recovery across the crypto market but also on technical indicators.

Chainlink formed a falling wedge pattern in mid-May. The upper trendline of the wedge halted LINK’s efforts for a bullish break, and the lower trendline prevented sharp declines. The digital asset traded within the formation for over six weeks, breaking out on July 23.

The falling wedge is a reversal pattern that promises a bullish break after the bearish formation is exhausted. Moreover, LINK managed to retest the 20-day exponential moving average (EMA-20: blue wave) as support and charged towards the 50-day simple moving average (SMA-50: red line). The trajectory of the EMA-20 also corrected upward, giving the LINK bulls hope for a possible golden cross.

The latter, in hindsight, is a bullish indicator that happens when a short-term MA crosses above a long-term MA. Thus, the golden cross formation promises a bullish phase ahead for as long as the short-term MA manages to hold the position.

LINK broke out of the falling wedge formation. Source: LINKUSD on TradingView.com
LINK broke out of the falling wedge formation. Source: LINKUSD on TradingView.com

Should LINK fulfill the pattern prediction, it could gain another 50 percent. Thus, the possible advance would be equal to the most significant distance between the falling wedge trendline, bringing the price to approximately $28.6.

Also read: Lackluster volume, business rivalry keeps Chainlink from popping 100%

What’s behind the rally?

The latest LINK rally was supported by the technical indicators on the charts and pumped by the recovery wave initiated by Bitcoin gains. In addition, BTC bulls pumped the price after a rumor kicked in about Amazon getting ready to accept crypto payments. As a result, the alpha crypto advanced by an impressive 23.5 percent in a week ($38,589), which led to a positive response from the altcoin market.

Ethereum (ETH) gained 25.8 percent in the said period, reaching $2,342 in the Monday session. Cardano’s ADA pumped 15.7 percent following larger cryptos, while the ADA/USD exchange rate stood at $1.34. Similarly, Dogecoin (DOGE) gained 27 percent, trading at $0.22.

The recovery wave also graced the LINK charts, granting a 29 percent advance in a week. The current bullish wave might continue throughout the upcoming week if the falling wedge formation pans out. If not, Chainlink still has a significant support bar to fall back on at $18.1. The bull outlook is strong as long as Bitcoin continues the rally.

Also read: Chainlink churns 40% gains in two weeks; analyst sees a LINK boom ahead.

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Chainlink, Chainlink chips bear trend with a 50% bullish wedge breakout—what lies ahead?

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