Today’s Chainlink rally leaves the price just 3% away from setting a new all-time high, but can bulls maintain the current momentum?
Chainlink (LINK), a smart contract blockchain network, is nearing an all-time high after the altcoin broke out today, notching a 11% gain at the time of writing.
The altcoin first hit a record high at $5.10 in July 2019 before crashing to $1.35 during the Black Thursday marketwide correction on March 12. Over the past two weeks LINK has gained 33% and if the price pushes above its previous all time high there is room for price discovery.
Crypto market daily performance. Source: Coin360
Three factors likely triggering LINK’s upsurge are: bullish price action from Ether (ETH), LINK’s bullish technical structure and the team’s recent partnership with China’s national Blockchain Services Network.
Ether’s rally pushes altcoins higher
In the past 48 hours, ETH price increased by nearly 9% from $227 to $244. This overnight rally led Tezos (XTZ) and LINK to rebound following a week of sideways trading.
Both XTZ and LINK rallied by triple-digits in the past year while many cryptocurrencies were down by 50% to 95% from their record highs in the same period.
LINK/USD 1-day chart. Source: TradingView
According to data from Cointelegraph Markets and CoinMarketCap, LINK is now only 3.37% away from it’s all-time high. In fact, the majority of stablecoins and wrapped assets have not declined by more than 10% from their record highs, whereas top cryptocurrencies like Bitcoin (BTC) and Ether remain far away from their all-time highs.
Favorable technical structure
The term ‘price discovery’ is frequently used when the price of an asset surpasses its record peak. Meaning, when an asset enters this phase, it’s hard to determine where the next top would be and this opens the market up for speculation.
When the price of a cryptocurrency nears a record high, it tends to display significant volatility. Sellers will try to avoid price discovery, while buyers will attempt to push through.
Cointelegraph contributor Michael van de Poppe said that if LINK remains above $4.30 the probability of seeing a new all-time high increases. In private comments van de Poppe said:
“LINK is still trading in a very bullish construction. The region between $4.70-$5.00 has been acting as resistance several times, which makes it likely to see a breakthrough in this case. A crucial area to hold is the $4.20-$4.30 level for support. If that remains as support, I’m expecting a new all-time high for LINK. I wouldn’t be surprised with a rally towards the $6.50-$7.00 region from here.”
Another factor contributing to LINK’s rally is the current stability in Bitcoin price and an extended rally from Ether would likely lead to additional buying pressure on LINK.
New partnership raises bullish sentiment
On June 23, Chainlink announced that China’s national Blockchain Services Network (BSN) is utilizing the Chainlink oracle network to process off-chain data.
The team said:
“China’s national Blockchain Services Network (BSN) is integrating Chainlink as the preferred oracle network to provide BSN systems access to off-chain data. As part of this collaboration, IRIS Network and SNZ Holding will also contribute technical integration support.”
The announcement coincided with the abrupt intraday increase in the price of LINK, further fueling the confidence among investors in the short-term trend of the asset.