Chainlink price has retreated in the past few days, but two emerging catalysts could push it higher in the coming weeks. The LINK token recoiled to $14 on Tuesday morning, down from last week’s high of $15.
SEC Ethereum ETF approval
The first catalyst is that the Securities and Exchange Commission (SEC) is expected to allow spot Ethereum ETFs to start trading on Tuesday. This move will be important because the SEC has often warned that Ethereum is a security, especially after the merger in 2022.
This merge introduced the concept of staking, where users delegate their tokens to validators and then earn a monthly return. As a result, all ETF applicants have foregone the staking element to gain the SEC’s approval.
The approval opens doors for companies to apply for other cryptocurrencies. As BanklessTimes noted, Solana will be the logical cryptocurrency because of its role in the crypto industry and its $82 billion market cap.
Chainlink is another viable cryptocurrency to have an ETF. It has an $8.5 billion market cap, over $300 million daily volume, and a clear utility in the industry. The network offers an Oracle service that lets developers bring external data to the onchain.
It secures some of the biggest players in the crypto industry, such as Uniswap, Maker, and AAVE. Through its Cross-Chain Interoperability Protocol (CCIP), it is also a big player in the tokenization industry.
LINK supply in exchanges is falling
The other potential catalyst for the Chainlink price is that its supply in exchanges has continued to fall in the past few months. Data shows the supply has dropped from 235 to 21.4% in the past 30 days.
According to Santiment, the last time this happened was in September last year, and the token jumped by 123% in the next four weeks.
Meanwhile, while subdued, Chainlink’s open interest in the futures market is doing well. Data by CoinGlass shows that this volume rose to $196 million on Tuesday, up from this month’s low of $143 million.
Open interest is an important feature in the futures market that looks at the volume of unfilled orders. A higher number is often seen as a positive sign for the underlying asset.
Chainlink price inverse H&S pattern
Finally, technically, the LINK price has formed an inverse head-and-shoulders pattern on the 4-hour chart. This is one of the most popular bullish signs in price action analysis. It now seems to form the right shoulder while remaining above the 50-period moving average.
Therefore, Chainlink price will likely have a bullish breakout, a move that will be confirmed if it rises above the neckline of this pattern.
