Chainlink’s price is inching towards a potential breakout from a bullish reversal pattern as excitement builds around the anticipated launch of spot exchange-traded funds (ETFs). Despite a recent decline of 26% over the past month, recent market developments are sparking renewed interest.
As of Thursday, Chainlink (LINK) saw its fifth consecutive day of gains, rising nearly 3% within a 24-hour period and trading at $13.43. However, the token still remains significantly below its price from a month ago, approximately 25.8% lower, and nearly 50% under its peak of $26.75 in August.
Market sentiment is being fueled by investor anticipation surrounding the potential launch of two spot ETFs from Grayscale and Bitwise, projected to happen possibly by December. These investment vehicles would enable institutional investors to acquire exposure to LINK tokens without directly purchasing or holding the cryptocurrency itself. The introduction of spot ETFs could play a vital role in supporting the token’s price over time.
Notably, significant accumulation of LINK tokens has been observed among whale investors. According to data from Nansen, these major holders now own 2.26 million LINK tokens, an increase from 1.67 million on November 20. This surge in accumulation reflects a bullish sentiment leading up to the anticipated ETF launches.
Moreover, the total supply of LINK tokens held across exchanges has decreased by 4.5% over the past week. This trend is often considered a positive indicator, as a reduction in available tokens for sale on exchanges can signify a more optimistic outlook among investors.
On the technical front, Chainlink’s daily chart reveals a developing falling wedge pattern formed by two downward-sloping, converging trendlines. This pattern typically indicates a consolidation phase that could signal a bullish reversal, especially if accompanied by rising trading volume or other momentum indicators.
In particular, the Moving Average Convergence Divergence (MACD) is aligning with this bullish forecast, having formed a bullish crossover with its signal line, indicating an increase in buying pressure among investors.
A successful breakout from the falling wedge could propel Chainlink above its 50-day simple moving average, possibly leading to a rally towards the $21.6 mark. This level corresponds with the 61.8% Fibonacci retracement level on the chart. A decisive break above this threshold, supported by strong volume and positive market sentiment, could pave the way for LINK to revisit its August high of $26.75, representing nearly a 100% increase from its current trading price.
As the market watches closely, the prospect of upcoming spot ETF launches could serve as a catalyst for Chainlink’s price recovery and long-term growth potential.
