Chainlink (LINK) emerged as one of the best cryptocurrency performers on Sep. 6 as it jumped 8.25% against the U.S. dollar.
In detail, the LINK/USD exchange rate reached $36.35 for the first time since May 20, months after bottoming out near $13.45, thus recovering by more than 170% altogether. At the same time, its recent bout of buying saw the prices chalking in about 36% month-to-date returns.
Ecosystem growth
As it happened, Optimism Ethereum announced on Sep. 1 that it had integrated Chainlink’s market-leading decentralized oracle solutions to its Ethereum layer-2 services. As a result, LINK, which serves as a payment and staking token inside the Chainlink ecosystem, rose by 36% on the prospects of seeing higher interim demand from Chainlink users.
The same fundamentals had assisted LINK investors in closing 2020 at a 540% profit.
A booming decentralized finance (DeFi) space and its dependency on Chainlink to secure live data feeds pushed the LINK demand higher among users and speculators alike. As a result, Chainlink’s market share in the DeFi market reached 80% at one point in time, reported ZDNet.
LINK continued its climb into the first quarter of 2021, surging 161%, but followed the upside boom with a disappointing second quarter after falling 37%. Its losses came in the wake of an overall correction trend across top cryptocurrency tokens, including Bitcoin (BTC) and Ether (ETH).
Yuriy Mazur, head of data analytics at crypto exchange CEX.IO, said the LINK/USD rates could climb above $50 in the coming three weeks. The analyst cited Chainlink’s partnership with over 76 new projects in August as one of the primary bullish backstops for its native token.
He told Cointelegraph:
“This relevance has perhaps boosted LINK accumulation to access the Chainlink offerings. As a result, spot traders appear ambitious to stir the price growth until LINK/USD retests the previous all-time high of $52.”
But for Stephen Tuttle, a financial analyst at Seeking Alpha, the next big upside target for the Chainlink token sits near $65.
Tuttle noted that traders had allocated all their attention to Ether due to its principal involvement in the booming nonfungible token (NFT) space. As a result, he anticipated a capital reallocation after the ETH price rally tops out, which would extremely benefit the Chainlink market.
“If Chainlink can once again reach 0.02 Eth per Link, at Ethereum’s current price, this would place the Link token at about $65, or a 2.6x increase from its current price of $25.”
At the time of writing, the LINK/ETH rate was 0.009 Ether.
Broadening wedge alert!
Chainlink’s latest price rally also surfaced in the wake of an overall crypto boom, with Bitcoin retaking $51,000 and Ethereum rising towards $40,000. Traders raised their bids across the crypto board, anticipating that the Federal Reserve would delay its taper plans after two disappointing U.S. jobs reports last week.
Related: Chainlink (LINK) looks for momentum while pro traders target $40
As a result, LINK’s market bias remain highly correlated to top coins. Atop that, the token hints at the formation of a bearish reversal indicator as highlighted in the chart below.
Dubbed Ascending Broadening Wedge, the indicator showcases two rising bullish trendlines that deviate from one another. The pattern does not warrant buying exhaustion but points to sellers’ ambition to take over each time after the price touches the upper trendline.
As a result, LINK/USD still holds the potential of undergoing a large pullback towards the lower Wedge trendline (around $28). Nonetheless, bears would need to close below $37.96, the 50% Fib level of the Fibonacci retracement graph drawn from $52.32-swing high and $13.61-swing low.
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