Chainlink (LINK) rose sharply in Thursday’s early European trading session as traders continued to seek hedge in the cryptocurrency market against a troubled bitcoin.
The exchange rate between LINK and dollar rose 24.16 percent from the intraday opening value to 24.9 US dollars. The recent uptrend came near a confluence of supports in the USD 19-20 price range, highlighted by the lower trendline on the LINK’s current RIN channel and the 21-day simple moving average.
Chainlink rebounds after testing its lower trendline support and the 21-DMA at the same time. Source: LINKUSD on TradingView.com
The technical pattern indicated that LINK would continue its retracement up towards the upper trendline of the channel. The level is close to $ 30, which would mean another record high for the Chainlink token.
Chainlink is up more than 100 percent in the first month of 2021, carried by an ongoing euphoria in the altcoin space against the restless price movement of Bitcoin. For example, the second largest cryptocurrency by market capitalization, Ethereum, hit its record high earlier this week.
In the meantime, the decentralized financial tokens AAVE, UniSwap, Alpha and SushiSwap have also reached record levels, indicating a possible capital outflow from Bitcoin to the altcoin markets in recent weeks.
The flagship cryptocurrency entered a period of consolidation after hitting an all-time high near $ 42,000 on Jan. 8. It fell more than 30 percent due to a number of basic catalysts, including daytrader profit-taking, a stronger US dollar, and uncertainty about US President Joe Biden’s $ 1.9 trillion stimulus plan.
Bitcoin has hit strong support levels around $ 30,000 but has been trading choppy. This has increased the demand for alternative digital assets, especially in the DeFi space. Data from Dune Analytics shows that the total amount locked in DeFi liquidity pools has increased to $ 24 billion.
> 8-fold growth in DEX volume since the DeFi summer 🤯
Imagine betting against this trend. Couldn’t be me pic.twitter.com/oW6oHvVs2Q
– jonathanjoseph.eth (@jonathanjoseph) January 23, 2021
Chainlink benefits from the DeFi enthusiasm. The rally, however, has received another boom from Grayscale Investments. The New York-based investment management firm has added six more trusts to its portfolio, including LINK. This increased the potential of grayscale to collect LINK tokens in the future.
Link to $ 50?
Michaël van de Poppe, an independent market analyst, claimed LINK’s growing market cap versus Bitcoin could test $ 50 in the second quarter of 2021.
“Chainlink is going according to plan here,” he said. “Rejection in a very important area of resistance that I expect will consolidate a bit here. After that, in April or so, we’ll see a full blown rally of cRypto with LINK go above $ 50 on the next pulse wave. “