Chainlink (LINK) Price Prediction: LINK Has Formed a Bullish Continuation Pattern, Will It Bounce Back?

Chainlink price has crashed this week, but catalysts point to an eventual comeback in the next few weeks.

Chainlink (LINK) price has had a rough week, but several promising catalysts could lead to a strong comeback in the next few weeks.

Chainlink price drops below key support

One catalyst for the LINK price this week is the continued decline in exchange balances. CoinGlass data shows that these balances fell from 157.6 million to 147 million, the lowest level since December 13.

A sharp decline in exchange balances is bullish for any cryptocurrency as it suggests that investors are not selling their coins. Typically, investors sell their coins by moving them from self-custody wallets to exchanges like Binance and Kraken.

A drop in exchange balances indicates that whales have been accumulating the LINK tokens. According to Santiment, the whales made nearly 1,700 transactions on Tuesday as the coin dropped, the highest increase in 2023.

🔗🐳 With crypto taking a swing back down, Chainlink has stood out as a network with heavy key stakeholder dip buying. 1,659 daily $100K+ $LINK transactions is the most since 2023, and 9,531 active wallets is the most in 4 weeks. When altcoins rebound, keep an eye on this asset. pic.twitter.com/GUjHJALLV3

These whales are likely buying Chainlink because of its strong fundamentals. For one, LINK has a staking yield of 4.32%, which is higher than most popular networks like Ethereum and Solana. Over 40.8 million LINK tokens have been staked.

Secondly, Chainlink is the dominant force in the oracle industry with a total value secured (TVS) of nearly $40 billion. It powers some of the largest platforms in the crypto space, including AAVE, Spark, Compound, Uniswap, GMX, Liquity, and Benqi.

Thirdly, the emerging Real World Asset (RWA) tokenization industry could also be boosting the Chainlink price. Analysts expect the sector to continue performing well as demand surges with firms like Apollo, Franklin Templeton, and Blackrock vying for a slice of the pie. Chainlink is well-positioned to benefit from this trend.

Chainlink price prediction

On the weekly chart, we can see that the LINK price has been forming a cup and handle pattern. The upper side of the cup is at $22.86 and was formed between March and November 2024. LINK has since formed a bullish flag pattern, which is a continuation pattern.

Chainlink has also been trading above the 50-week Exponential Moving Average (EMA), which is a bullish indicator in the market. The recent decline is part of the formation of the handle portion of the pattern.

As a result, we can expect the Chainlink price to continue rising, with bulls targeting the critical resistance level at $37.85. This price target is arrived at by measuring the depth of the cup and adding the same distance from the upper side of the cup. It is nearly 95% up from the current levels.

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