- LINK prices rose by 4.24% over the past 24 hours.
- Analyst eyes $22 if the altcoin holds $12 resistance level.
Over the past two months, the altcoins market has experienced extreme volatility. However, the altcoin market seems to have begun a recovery as of press time.
As altcoins start to recover, Chainlink [LINK] was responding positively making moderate gains. As such, at the time of writing, LINK was trading at $10.23 after a 4.24% hike in 24 hours.
Prior to this, LINK was experiencing a strong downward trajectory. After hitting $12.6 in August, the altcoin formed a falling wedge pattern. With the decline, it dropped to a low of $9.2.
Despite the recent gains, LINK remains relatively low of the recent local high of $15 recorded in July. Also, it’s still down by approximately 80.6% from its ATH of $50.88.
Therefore, recent gains raise questions about whether the altcoin is positioned for further gains or it’s a mere market correction. Popular crypto analyst Cryptojack suggested LINK was prepared to make 4x gains.
Prevailing market sentiment
Source: X
In his analysis, Jack highlighted two major conditions LINK has to fulfill to hit $22. According to the analysts, LINK’s falling wedge must stay above the $6 support level.
He observed that the altcoin’s falling wedge is approaching this critical level and a breach downside will result to further dip.
Secondly, the analysts argue that LINK has to break out from the falling wedge to prepare for a strong uptrend. He posits that a breakout from the pattern will strengthen the altcoin to make 4x gains and hit $22.
Based on this analysis, a breakout from this pattern is a recipe for further gains. Looking at the charts, every time LINK breaks out of a falling wedge it makes significant gains. For instance, it previously rose from a local low of $8.0 to a local high of $12.6.
What LINK charts suggest
Undoubtedly, the conditions highlighted by Jack provide a positive outlook of outlook. However, what do other market indicators say?
Source: Santiment
Firstly, Chainlink’s Market value to realized value (MVRV Ratio), has turned positive after a sustained negative value. For most of the past week, MVRV has been negative.
However, at press time, the MVRV ratio had turned positive to 0.29. A shift from negative to positive shows market recovery with market value rising above the realized value.
This signals a recovery phase or the market is experiencing bullish sentiment. Also, such market behavior shows a shift from in-market sentiment with increased demand and optimism.
Source: Santiment
Additionally, LINK’s open interest per exchange has increased over the past week. As such, open interest in exchanges has experienced movement over the past week.
It has increased rom a low of $36 million and settled at $40 million. The increase in open interest per exchange shows more investors are betting on further price increases.
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This was a bullish signal as investors are opening new positions while paying a premium to hold their positions in case of a downside.
If it holds between $10 and $12, it would stage an upward movement. If the daily candle stick closes above $10.5, LINK will be well positioned to attempt a $15 resistance level in the short term.