San Francisco, California – Chainlink, a popular cryptocurrency known as LINK, has recently experienced a breakout with robust momentum. This surge has led to a significant increase in its value, showcasing an impressive return on investment of 18.58%. The breakout was characterized by strong momentum without an immediate retest, indicating potential strength in the price action.
However, despite this bullish rally, challenges remain for Chainlink in the form of a mid-term downtrend that has persisted since March. The next crucial resistance levels to monitor are at $13.1 and $16.8, raising questions about the sustainability of this recent rally.
In the past week, Chainlink paired with Bitcoin (LINK/BTC) has exhibited resilience by approaching the $12 price level. To sustain this positive momentum, Chainlink must surpass the 2100 sats level. Clearing this obstacle could pave the way for Chainlink to follow the upward trajectory seen in other decentralized finance (DeFi) projects and target the 4400 sats level.
Recent indicators suggest that Chainlink has completed a mini cycle, showcasing a divergence between price action and the Relative Strength Index (RSI) on a weekly basis. This divergence implies a potential initiation of a new bull run for Chainlink, further fueled by similar patterns observed in other altcoins.
The broader altcoin market is demonstrating similarities to previous market cycles seen in 2017 and 2021, hinting at a potential altseason on the horizon. This consolidation phase in altcoin market capitalization has historically preceded substantial rallies, raising hopes for a favorable environment for Chainlink and other altcoins.
Chainlink’s correlation matrix with major crypto assets, including Bitcoin, Ethereum, Dogecoin, and Shiba Inu, highlights strong relationships with these assets. The anticipated rate cuts by the Federal Reserve in mid-September, leading to a weaker USD, could further bolster Chainlink’s price movement. Additionally, the negative correlation between Chainlink and the USD suggests that a weaker dollar could be advantageous for Chainlink and other crypto assets.
As Chainlink continues to test key resistance levels and maintain strong correlations with leading crypto assets, the outlook for the cryptocurrency appears optimistic. The upcoming altseason and the potential weakening of the USD provide added support for Chainlink’s upward trajectory in price.