- Chainlink formed a potential double bottom pattern
- The long-term UDPI suggests LINK is on the ground
Chain link [LINK] has seen significant developments through partnerships with various industry players. This has driven its adoption in the cryptocurrency space.
At the time of writing, LINK’s price appeared to be moving in a downtrend channel given the daily time frame. Although this has been the case since June, it has recently found a potential bottom. The bottom to be confirmed if the price breaks the short-term high at $13.
LINK’s price, which has been trending south lately, took liquidity below $13 and found support at $9.42. Here the double bottom seemed to be forming.
The MACD also turned bullish, partially confirming this pattern. That said, the main test will come whether LINK can break the $13 level.
Source: TradingView
Should the price rise above the upper trendline and stay there, this could mean a 35% increase if the total altcoin market cap supports this move. However, if LINK falls below the prevailing support zone, it may continue to decline.
If the current bottom holds, the fourth quarter of 2024 could be bullish for LINK. This will provide an ideal starting point for traders and investors betting on a price recovery.
Chainlink long-term UDPI risk model
The Upside-Downside Potential Index (UDPI) long-term risk model for LINK is also now at an all-time low.
This model, which evaluates risk-reward scenarios over time, suggests that LINK has greater profit potential when the UDPI is low.
Current market sentiment around LINK is extremely low, with price action and bullish activity being subdued. However, the UDPI showed that LINK is at the lowest risk level – a crucial area to monitor as the fourth quarter approaches.
Source: Polarity Digital
Historically, such levels have marked deep value zones for LINK. And a turnaround could be imminent as market conditions adjust.
NVT ratio growing…
Additionally, Chainlink’s on-chain activities have also increased, with the network value to transaction (NVT) ratio showing growth.
The steady increase in NVT from the beginning of the year indicates increasing activity on the Chainlink blockchain.
This is a bullish signal for LINK, one that supports the idea that the price has found a solid bottom and could head higher soon.
Source: IntoTheBlock
Chainlink’s social dominance
Finally, LINK’s social activity has also increased enormously. Among the top 10 crypto projects, Chainlink has a social dominance of 1.65%, based on social posts and engagements across platforms.
This growing social engagement further strengthens the bullish sentiment for LINK. Especially since greater social visibility often comes with higher interest rates and potential price movements.
Source: LunarCrush
In conclusion, Chainlink’s recent partnerships, on-chain activity, and social dominance all point to the potential for a higher price as market conditions improve.
If LINK holds its current support and the double bottom pattern plays out, significant price appreciation could occur in the coming months.