- Chainlink formed a potential double bottom pattern
The long-term UDPI suggests LINK has hit the floor
As a seasoned analyst with over two decades of experience in the finance industry, I’ve seen my fair share of market patterns and cycles. The current situation with Chainlink (LINK) seems to be intriguing, to say the least.
Chainlink (LINK) has experienced substantial progress due to collaborations with numerous key players within the industry. This collaboration has led to an increase in its usage and acceptance throughout the crypto market.
As I compose this, on an hourly basis, LINK‘s price appears to be following a downward trending channel. However, this has been the pattern since June, but it has recently reached what could potentially be a support level. This support will be confirmed if the price manages to surpass the short-term high at around $13.
Recently, LINK‘s price has been on a downward slope, reaching a low of nearly $13 before finding support at $9.42. This is where a potential double bottom pattern seems to be emerging.
The Moving Average Convergence Divergence (MACD) has turned positive, lending some support to this particular trend. However, the true test lies in whether Chainlink (LINK) can surpass the $13 mark.
If the price surpasses the upper trendline and remains elevated, it might indicate a potential increase of approximately 35%, assuming the overall cryptocurrency market capitalization allows for such a move. Conversely, if Chainlink (LINK) falls below its existing support area, it may continue to slide downwards.
Should the current support level persist, there’s a possibility that the fourth quarter of 2024 could see a bullish trend for LINK. This scenario would offer an excellent opportunity for traders and investors who anticipate a price increase to enter their positions.
Chainlink long-term UDPI risk model
Currently, the long-term Risk Model based on the Upside-Downside Potential Index (UDPI) for LINK stands at historically minimal values.
The given model, designed to assess risk versus reward situations over an extended period, indicates that LINK tends to yield more substantial returns when the Universal Depreciation Protection Index (UDPI) is at its lowest levels.
In simpler terms, the general feeling towards LINK in the market right now is quite negative, as its price isn’t rising much and there’s not a lot of optimism among investors. Yet, an indicator called UDPI shows that LINK has the least amount of risk associated with it – A key observation to keep in mind as we move into the fourth quarter.
Historically, these levels have often indicated undervalued areas for LINK. If market conditions become favorable, a turnaround might occur soon.
NVT ratio growing…
Moreover, the volume of transactions conducted on Chainlink’s blockchain has been rising significantly, as indicated by the increase in its Network Value to Transactions (NVT) ratio.
The consistent rise in Chainlink’s Network Value Transactions (NVT) since the beginning of the year suggests a significant increase in activity on the Chainlink blockchain.
As a crypto investor, I’m observing a positive development with Chainlink (LINK). This bullish indication suggests that the price might have established a robust base, potentially setting it up for an upward trajectory in the near future.
Chainlink’s social dominance
Lastly, it’s worth noting that Chainlink’s social engagement has significantly increased. In fact, among the leading 10 cryptocurrency projects, Chainlink holds a social influence percentage of approximately 1.65%, calculated from social interactions and posts across multiple platforms.
This growing social engagement further bolsters the bullish sentiment for LINK. Especially as increased social visibility often correlates with higher interest and potential price movements.
To summarize, the growing number of partnerships, increased on-chain activity, and strong presence in social media for Chainlink suggest that its price could increase significantly if market conditions become more favorable.
Should LINK maintain its existing base and the anticipated double-bottom formation materializes, we might witness a substantial increase in value over the next few months.
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2024-09-14 10:16