Chainlink price is forming a major bullish reversal pattern that could ultimately lead to a potential surge to $12 over the coming weeks.
According to data from crypto.news, Chainlink (LINK) price rallied nearly 8% to $9.40 on Tuesday, locking in gains of nearly 13% from its lowest point over a monthly period. Despite this, the token remains down nearly 25% below from where it started this year.
The 17th largest crypto asset by market cap is showing a highly bullish reversal pattern that suggests the token could be close to a breakout soon.
On the daily chart, Chainlink price appears to be completing a double bottom pattern, which is one of the most popular bullish signs in technical analysis. A breakout from the neckline of such a pattern has historically been followed by strong upside in a related asset for multiple sessions.
For Chainlink, a breakout from the $10 neckline of the pattern formed could push its price to above $12. This level is calculated by adding the height of the double bottom pattern to the neckline itself.
For now, the most immediate resistance sits at $10, which also serves as a key psychological resistance level. On the contrary, a drop below $8 could erode the ongoing bullish momentum and potentially invalidate the current setup.
Momentum indicators such as the MACD and RSI suggest that a recovery could already be underway. Notably, the MACD lines have moved upwards and are close to breaking out of their bearish zone, while the RSI has bounced above neutral thresholds, suggesting bulls are regaining control of the market.
A major catalyst that seems to be supporting Chainlink price has been active accumulation by whales. According to recent reports, whales have added another 1.89 million LINK tokens worth approximately $16.9 million recently, bringing total holdings by these investors to 661.9 million tokens.
What is interesting is that this large-scale purchase came alongside declining LINK reserves on exchanges, a sign that investors are moving their assets into cold storage for long-term holding.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
