Chainlink Proof of Reserve Integration Drives 7% LINK Price Growth
Can LINK Reach a New Yearly High? | Credit: Hameem Sarwar
Key Takeaways
- Chainlink announced that ARK and 21 shares will use its Proof of Reserve feature.
- The LINK price trades inside a long-term descending parallel channel.
- Will Chainlink break out from this pattern and confirm its trend reversal?
Chainlink started 2024 on a bullish note but has fallen considerably since its yearly high in March. After beginning to recover on Aug. 5, LINK created a higher low in September and now attempts to break out from its long-term corrective channel.
Will Chaninlink break out from this channel, confirm its bullish trend reversal, and reach a new yearly high? Let’s find out.
Chainlink’s Proof-of-Reserves
On Sept. 24, Chainlink announced that asset manager ARK Invest and Exchange-Traded Product (ETP) issuer 21 Shares will integrate Chainlink’s Proof-of-Reserve (PoR) into their products.
The approval of Bitcoin and Ethereum spot Exchange-Traded Funds (ETF) has highlighted the need for issuers to securely transfer their data on the chain, and Chainlink plays a critical role in this process.
21.co, the parent company of 21 Shares, also integrated Chainlink’s PoR on Ethereum and Solana to increase the transparency of 21BTC, its wrapped Bitcoin product.
21.co chose Chainlink because it has secured over $15 trillion in transaction value and has an easy-to-integrate infrastructure.
The main benefits of Chainlink’s PoR regarding crypto ETF issuers are programmability, decentralization, and transparency.
Data from Santiment also shows that Chainlink ranks second among other blockchains based on development activity over the past 30 days.
LINK Price Shows Bullish Signs
The weekly time frame shows that the LINK price started a five-wave increase in June, culminating with March’s yearly high of $22.87.
Since then, the price has fallen in an A-B-C corrective structure contained inside a descending parallel channel. The channel has existed for 196 days.
The LINK decline culminated with a low of $8.08 in August, creating a long lower wick. The bounce validated a horizontal support area and the 0.768 Fibonacci retracement support level.
Then, Chainlink’s price moved above the channel’s midline, indicating an impending breakout.
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Technical indicators like the weekly Relative Strength Index (RSI) and MACD support this assessment. The RSI broke out from its resistance trend line and has nearly moved above 50, while the MACD is close to making a bullish cross (black circle).
A breakout from the channel will likely cause these indicators to cross their thresholds, in turn confirming the bullish trend reversal. In that case, the next closest resistance will be at $18.20.
Chainlink’s Resistance
While the weekly time frame gives a decisively bullish outlook, the daily time frame suggests that LINK still needs to clear the $12.60 resistance area to confirm its bullish trend. The area had previously provided support since April, so its reclaim is needed to confirm the trend.
However, the Chainlink price is well on its way to confirming this reversal, since it has already broken out from a descending resistance trend line.
During the breakout, the RSI moved above 50 and the MACD increased above 0, validating the movement.
So, a LINK breakout above $12.60 is likely. If this happens, a breakout from the long-term channel could be next, confirming the bullish trend reversal.
Breakout Looming
Chainlink’s price shows several bullish signs in the weekly and daily time frames. Positive Chainlink news regarding its Proof-of-Reserves integration also bodes well for the future trend. A breakout from the long-term channel will confirm the bullish trend reversal.
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