Chainlink’s $22 potential: Why this analyst sees big gains for LINK
Chainlink has made moderate gains after a sustained decline. Analysts are now predicting a surge to $22.
- LINK prices rose by 4.24% over the past 24 hours.
- Analyst eyes $22 if the altcoin holds $12 resistance level.
Over the past two months, the altcoins market has experienced extreme volatility. However, the altcoin market seems to have begun a recovery as of press time.
As altcoins start to recover, Chainlink [LINK] was responding positively making moderate gains. As such, at the time of writing, LINK was trading at $10.23 after a 4.24% hike in 24 hours.
Prior to this, LINK was experiencing a strong downward trajectory. After hitting $12.6 in August, the altcoin formed a falling wedge pattern. With the decline, it dropped to a low of $9.2.
Despite the recent gains, LINK remains relatively low of the recent local high of $15 recorded in July. Also, it’s still down by approximately 80.6% from its ATH of $50.88.
Therefore, recent gains raise questions about whether the altcoin is positioned for further gains or it’s a mere market correction. Popular crypto analyst Cryptojack suggested LINK was prepared to make 4x gains.
Prevailing market sentiment
In his analysis, Jack highlighted two major conditions LINK has to fulfill to hit $22. According to the analysts, LINK’s falling wedge must stay above the $6 support level.
He observed that the altcoin’s falling wedge is approaching this critical level and a breach downside will result to further dip.
Secondly, the analysts argue that LINK has to break out from the falling wedge to prepare for a strong uptrend. He posits that a breakout from the pattern will strengthen the altcoin to make 4x gains and hit $22.
Based on this analysis, a breakout from this pattern is a recipe for further gains. Looking at the charts, every time LINK breaks out of a falling wedge it makes significant gains. For instance, it previously rose from a local low of $8.0 to a local high of $12.6.
What LINK charts suggest
Undoubtedly, the conditions highlighted by Jack provide a positive outlook of outlook. However, what do other market indicators say?
Firstly, Chainlink’s Market value to realized value (MVRV Ratio), has turned positive after a sustained negative value. For most of the past week, MVRV has been negative.
However, at press time, the MVRV ratio had turned positive to 0.29. A shift from negative to positive shows market recovery with market value rising above the realized value.
This signals a recovery phase or the market is experiencing bullish sentiment. Also, such market behavior shows a shift from in-market sentiment with increased demand and optimism.
Additionally, LINK’s open interest per exchange has increased over the past week. As such, open interest in exchanges has experienced movement over the past week.
It has increased rom a low of $36 million and settled at $40 million. The increase in open interest per exchange shows more investors are betting on further price increases.
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This was a bullish signal as investors are opening new positions while paying a premium to hold their positions in case of a downside.
If it holds between $10 and $12, it would stage an upward movement. If the daily candle stick closes above $10.5, LINK will be well positioned to attempt a $15 resistance level in the short term.
