Chainlink (LINK), a prominent player in the cryptocurrency market, has been showing signs of a strong recovery and potential further gains. After rebounding by over 240% from its yearly low of around $4.70 in June 2023, LINK's price dynamics are drawing attention in the crypto community.
Currently priced at $15.99, LINK is approaching a critical juncture, as indicated by its recent consolidation within what appears to be an ascending triangle pattern since November 2023. Ascending triangles are generally viewed as bullish continuation patterns, particularly when they occur during an uptrend.
The pattern is characterized by a flat upper trendline and a rising lower trendline, suggesting accumulation in the price. The resolution of this pattern typically happens with a breakout above the upper trendline. For LINK, this scenario could mean an increase in its value to over $19.50, representing a 20% rise from its current levels, should it decisively break above the resistance near $16.
Decreasing Supply on Exchanges Bolsters Bullish Outlook
Further insights into Chainlink's potential rally are provided by examining LINK's supply across various crypto exchanges. As of December 3, 2023, crypto exchanges held approximately 150.39 million LINK tokens, marking the lowest level since February 2020.
This represents a 19% decrease from the 2023 peak supply of 185.71 million LINK tokens in August, a period that coincided with a 150% increase in the token's value. The declining supply of LINK tokens on exchanges is indicative of a growing preference among traders to hold onto their tokens rather than sell them for other assets.
This trend could signal a strong demand for LINK, bolstering the potential for its continued bullish run in 2023. If the demand for LINK remains robust and supply continues to diminish, the token's value could see further appreciation, aligning with the technical patterns observed.
Both on-chain data and technical indicators point toward a bullish future for Chainlink in the short term. Traders and investors alike will be closely watching LINK's performance in the coming weeks, especially as it approaches a possible breakout from its ascending triangle pattern.