- Chainlink (LINK) is showing bullish momentum, holding above key support levels at $16.59 and eyeing a 30% rally toward $22.05, backed by strong on-chain indicators like a high long-to-short ratio and positive funding rates.
- However, if LINK closes below $16.59, the bullish outlook would be invalidated, potentially leading to a drop toward $13.08.
Chainlink (LINK) continues to extend its recent rally, gaining over 4% on Thursday and building on a nearly 13% surge over the past two days. With key technical indicators showing strength and bullish sentiment growing, LINK traders are eyeing a potential 30% upside. But will the momentum hold, or is a pullback on the horizon?
Chainlink Finds Strong Support
One of the critical factors supporting LINK’s bullish outlook is its ability to hold above key support levels. The price has successfully retested and stayed above a descending trendline, which aligns with the 50-week Exponential Moving Average (EMA) at $16.59 and the 61.8% Fibonacci retracement level at $16.91. At the time of writing, LINK trades around $18.81, well above these support zones.
If these support levels remain intact, LINK has a strong chance of extending its rally to retest the February 3 high of $22.05—representing a 30% increase from its current price.
Bullish Indicators Fuel Optimism
Several technical indicators further support the bullish outlook for Chainlink:
- Long-to-Short Ratio: Coinglass data shows LINK’s long-to-short ratio at 1.04, the highest in over a month. A ratio above one suggests more traders are betting on price increases, reinforcing a positive market sentiment.
- OI-Weighted Funding Rate: The Open Interest (OI) Weighted Funding Rate for LINK stands at 0.0018%. A positive rate indicates that long positions (buyers) are paying shorts (sellers), a sign that traders expect further price appreciation.
- Relative Strength Index (RSI): Currently, the RSI on the weekly chart has slipped slightly below the neutral 50 level, signaling mild bearish momentum. However, if the RSI climbs back above 50, it could indicate sustained bullish strength.
What Could Invalidate the Bullish Thesis?
While the outlook for LINK remains positive, traders should watch for potential downside risks. A weekly candlestick close below the 50-week EMA at $16.59 would invalidate the bullish thesis, potentially triggering a decline to $13.08, the low seen earlier in the week.
Conclusion: Is LINK Ready for a 30% Rally?
With strong support holding and bullish indicators pointing to further upside, Chainlink appears poised for another leg up. However, maintaining key levels is crucial for the rally to continue. Traders should watch the RSI and long-to-short ratio closely, as they will provide further confirmation of LINK’s next move. If support at $16.59 remains unbroken, a retest of $22.05 could be just around the corner.