The Chainlink price continued its strong downward trend as a sense of fear spread throughout the crypto and stock markets. The LINK token plummeted to a low of $12.77, marking its lowest level since November 4 and a 60% decline from its peak in December. Still, technicals suggest that the LINK price may soon surge by over 100%.
Chainlink Price Forms a Giant Megaphone
A megaphone pattern is characterized by two ascending and diverging trendlines. The upper side connects an asset’s higher highs, while the lower side connects the lower highs over a certain period.
In most cases, this wedge pattern usually leads to a spectacular rebound. In Chainlink’s case, the upper side of the wedge linked the highest swings since November 2022, while the lower side connected the lowest points since July 2023.
The LINK price is now approaching the lower boundary of the megaphone pattern, which will likely result in a strong rebound. The bullish outlook will persist as long as the price remains above the lower side of this megaphone.
If the rebound happens, the next reference level to watch will be $30, the highest level in 2024. This price target coincides with the 50% Fibonacci Retracement point and is about 135% above the current level.
A drop below the lower boundary of the wedge pattern will invalidate the megaphone and lead to support at $5.57, a level it failed to breach several times between 2022 and 2023.
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Catalysts for the LINK Price
The Chainlink price has several potential catalysts. First, Arkham data shows that it is one of the coins the US government holds. Wallets associated with the Federal government hold LINK tokens worth over $1.7 million, suggesting that the government may consider including it in its digital asset portfolio.
Second, Chainlink aims to become a major player in the Real World Asset (RWA) tokenization industry, which is expected to transform the finance sector. With RWA, people will be able to convert real assets like real estate or art into tokens that can be swapped and transferred easily.
Third, Chainlink price may benefit from the ongoing partnership with SWIFT, which handles over $150 billion in transactions annually. The two organizations will carry out a pilot program later this year. This will be the third trial after they conducted another one on settling tokenized fund subscriptions and redemptions with UBS.
Further, the Securities and Exchange Commission (SEC) has become friendly to the crypto industry. As such, there is a likelihood that the agency will allow a potential spot LINK exchange-traded fund later this year.
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