Tech

LINK Sheds Most Of Its Recent Gains, But Bullish Prospects Remain

12/15/2022
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Chainlink (LINK) rose an impressive 41% from lows around $5.5 to highs above $7.8 between November 21 and December 1. This rally saw the Chainlink price break above key resistance levels. However, the recent retracement below the same crucial support levels points to a continuation of the ongoing correction.

Nevertheless, the LINK price recently rallied 5.7% in a recovery that halted at the moving averages. This rise in the price of the oracle token was attributed to the recent market news related to Chainlink Automation going live on the Arbitrum mainnet. However, the approximately 5% declines recorded in the last 48 hours have left investors confused.

Chainlink Automation Goes Live On Arbitrum One

Chainlink Automation, the reliable and high-performance smart contracts on the Chainlink blockchain, has launched on Arbitrum. According to a news report on PR News Wire, the two blockchain projects announced the integration of Chainlink Automation which is expected to help developers on Arbitrum One to build “hyper-reliable and decentralized ” apps. 

According to the news release, Chainlink, the leading oracle services provider has been helping Arbitrum One, a top  Layer 2 scaling solution for Ethereum dApp development, to drive the growth of its decentralized finance (DeFi) ecosystem. The launch of Chainlink Automation on Arbitrum One is expected to give developers access to performant and reliable automation required to create advanced dApps. 

This will be made possible by leveraging Chainlink’s network of nodes that monitor smart contracts and then execute functions using the blockchain’s transaction manager. Chainlink’s ‘battle-tested’ transaction manager takes care of nonce-management, network reorganizations, and gas spikes. 

Chainlink Lab’s Head of Blockchain Partnerships Niki Ariyasinghe said, We’re excited to support the Arbitrum ecosystem with the native integration of Chainlink Automation, enabling developers to build highly scalable and low-cost smart contract applications that are automated end to end.”

With improved uptimes and safety guarantees now possible with Chainlink automation, “Arbitrum developers can build the next generation of decentralized applications and help reliably scale the Web3 ecosystem,” added Ariyasinghe. 

According to A.J. Warner,  the Chief Strategy Officer of Offchain Labs, the company behind Arbitrum, combining Chainlink’s reliable blockchain automation solution with Arbitrum One’s Layer-2 ecosystem now gives the developers the ability to build advanced, feature-rich dApps that can scale at an even lower cost. Warner said: 

“DeFi apps have experienced tremendous growth on the Arbitrum One, which allows them to scale in a secure manner. Similarly, Chainlink Automation helps dApps reliably scale by enabling them to automate DevOps and maintenance tasks without having to rely on centralized scripts or worry about single points of failure.”

The integration of Chainlink Automation on Arbitrum One is the latest addition to the growing list of projects who are already integrating it into their dApps. These projects include Cask, COTI and Armadillo, and DeFiEdge which are leveraging Chainlink Automation to reliably trigger key smart contract functions.

Can Chainlink Price Return To $10?

LINK price action between November 23 and December 1 saw the token rally 41% to create a swing high at $7.8. This impressive recovery drove the oracle token above key levels including the 50-day simple moving average (SMA) which coincided with the $7.0 psychological level, and the 100-day and 200-day SMA both sitting around $7.16

Usually, asset prices tend to deviate from key support levels before returning to the zones to establish a launching pad. For the Chainlink price, falling back below the SMA the range could see it revisit the $6.2 support floor. In a likely move, the token could tag the $5.5 swing-low to complete the inverted V-shaped retracement. 

If this happens, it would represent a 16.5% drop from the current levels. The position of the Relative Strength Index (RSI) in the negative region and the downward movement of the Moving Average Convergence Divergence (MACD) indicator supported such a correction. The price strength at 43 suggested that the LINK price was in the hands of the bears. 

LINK/USD Daily Chart

Chainlink Price Chart
TradingView Chart: LINK/USD

On the upside, a retest of either of the barriers mentioned earlier would provide buyers with an opportunity to buy into LINK at a discount and trigger an uptrend that may push the price higher. The resulting upswing would likely propel the token back to retest the range high at $7.8. 

Overcoming this hurdle would open the path to the $9.5 swing high or the $10 psychological level. Such a move would constitute a 50% ascent from the current levels.

Chainlink’s positive outlook was supported by the position of the price above the governing pattern’s descending trendline. Also, the SuperTrend indicator still remained positive suggesting that the overall market sentiment for LINK was positive.

The technical and fundamental analysis above suggested that Chainlink investors should not worry about the ongoing correction. The Chainlink ecosystem is fueled by the delivery of important milestones toward Ethereum compatibility and Chainlink Automation integrations. As long as this happens, the potential for further price appreciation is likely.

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Source: https://insidebitcoins.com/news/chainlink-price-prediction-link-sheds-most-of-its-recent-gains-but-bullish-prospects-remain