The cryptocurrency Chainlink has gone up more than 40% in the last one month fueled by its real world demand for asset tokenization, on chain accumulation and high demand for its cross-chain protocols.
Due to all these, the demand for Chainlink has surged and therefore there is a price appreciation of its cryptocurrency.
What is more surprising is that the rally in Chainlink has just started. Price trends indicate a $28 target in Q1 of 2024.
Chainlink has formed a rounding bottom pattern on weekly charts and broken out of a narrow trading range (last 3 months) recently. Both of these patterns hint towards a much stronger bull run in the near future for the cryptocurrency.
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Two Extremely Bullish Patterns on Weekly Charts
The weekly charts show two patterns at once, Rounding Bottom as well as CUP and HANDLE. Both these charts are extremely bullish and considering that they have formed in the weekly charts makes this cryptocurrency bullish in the long term.
Rounding Bottom:
Rounding Bottom has finished in Feb 2024. It started on April 2022. The depth of the patter was $10.
#NOTE: Rounding bottom is a chart pattern that shows that the price trend for a cryptocurrency has reversed from negative to positive. This pattern usually forms when there is a overall change in the direction of the markets.
Cup and Handle:
The cup and handle pattern has been forming alongside the rounding bottom. The cup started forming in 4 April 2022 and has finished in 6 November 2023. The handle started forming in the same day as the cup ended and the entire pattern finished forming on 29 Jan 2024.
The target for the cup and handle pattern comes at $26 – $28.
#NOTE: The Cup and Handle chart pattern is a technical analysis tool used by traders to identify potential bullish continuation or reversal setups in the price charts of financial assets. It is characterized by its unique shape, resembling a tea cup with a handle. Targets for this pattern in same as the depth of the cup and is measured from the point where the handle is completed.
Chainlink Break-out of Trading Range on Daily Charts
The cryptocurrency had been stuck in a price range of $13.4 to $17 since the last 3 months (Nov-Jan 2024). The positive movement of its price above $7 showed that Chainlink has broken out of a long consolidation with a decisive breakout.
This breakout acts as a confirmation to the CUP and HANDLE pattern in the weekly charts.
#NOTE: A breakout is a price movement out of a trading range or pattern. It signals positive price growth in the near future. This is opposite to a breakdown which shows the price might go further down in the near term.
Disclaimer: This is not trading advice, neither is financial advice. Until there is a regulatory approval for Crypto Advisors, we will stick to presenting just research.
