Chainlink Price Set to Break 3-Month Downtrend: How High Can LINK Go?

Chainlink price is on an uptrend as it has gained over 25% in the last seven days, outperforming the top 20 cryptocurrencies. The short-term outlook for LINK price is a 7% retracement to crucial support where either a bounce could happen, or a break lower could invalidate the current bullish thesis. LINK is down 6.1% for the day, which aligns with the general market downturn that sank the total crypto market cap by 2.6%, per CoinGecko data.

Why is Chainlink Price Rising?

Chainlink price began surging on August 21 after Sony announced the launch of their own blockchain — Soneium. Chainlink began pumping after speculations of a partnership emerged following the announcement. 

Aside from Optimism’s OP Stack, Sony chose Chainlink’s CCIP for its development. 

.@Soneium—a next-gen blockchain by #Sony Group and @StartaleHQ—has chosen Chainlink as its premier launch partner.

By integrating the Chainlink platform, Soneium leverages the infrastructure needed to drive adoption as it enters the blockchain industry.https://t.co/wmAmY36D98 pic.twitter.com/2Esr2zC5Pj

— Chainlink (@chainlink) August 23, 2024

According to Chainlink Chief Business Officer Johann Eid, Soneium will be “adopting Chainlink CCIP as its canonical cross-chain infrastructure, Chainlink Data Feeds, which will be accessible to developers through Chainlink Scale, along with Functions and VRF to power a robust, developer-friendly ecosystem.”

LINK price is currently retracing, but the hype around the news remains fairly palpable among the LINK community.

Futures Traders Gunning For That 7% in Shorts

Despite the bullish fundamental news for Chainlink, data from Coinglass shows Futures traders have opened overwhelmingly large shorts on LINK, betting on it to drop. This may be because investors paused to book profits following the 25% weekly rise, and prices began to retrace.

According to the Chainlink price daily chart, LINK is trending below the 50-day exponential moving average (EMA), with the next potential support level around $10.87. 

This comprises a 7.6% drop from the current price and might be what Futures traders are gunning for, as data from Coinglass Liquidation Map shows. The large imbalance between the cumulative Short and Long Liquidation Leverage reveals that bearish sentiment dominates the market, although in the short term.

A huge sell wall between $12.11 and $12.51 may make it difficult for the price to rise. However, if bulls prevail, these traders may be liquidated.

The Road Ahead for Chainlink Price

LINK price prediction shows if it bounces from the $10.87 support, it may surge 27% to $13.87, where it will encounter the 200-day EMA that has been suppressing the price for the last 72 days.

If the price breaks above this major resistance, Chainlink may extend gains by another 37% to $19.28 before eyeing $22.91 to break the yearly high.

Overall, Chainlink price is bullish, with the short-term projected drop only being part of a healthy correction.