• Chainlink’s(LINK) partnership with DTCC has sparked a significant price surge, breaking a 65-day resistance trend line.
  • The price of LINK is now testing the crucial $17 resistance level, a pivotal point for determining future trends.

Chainlink (LINK) has captured the attention of investors and analysts alike after surging to a 35-day high. This spike follows the announcement of a groundbreaking partnership with the Depository Trust & Clearing Corporation (DTCC), aimed at revolutionizing fund tokenization. As LINK approaches the critical $17 resistance level, market participants are keen to see if this marks the end of a prolonged correction phase.

What is Chainlink’s Tokenization Fund?

On May 16, Chainlink unveiled a collaboration with DTCC to launch the Smart Net Asset Value (NAV) pilot. This initiative leverages Chainlink’s Cross-Chain Interoperability Protocol (CCIP) to securely transmit fund NAV data across blockchains. Key financial players like JPMorgan and Franklin Templeton are also participating, underscoring the project’s significance in the financial sector.

The primary goal is to tokenize funds and enable smart contracts to hold and disseminate data efficiently. This advancement promises to streamline brokerage portfolio applications and automate data distribution, marking a significant stride in the tokenized asset economy. Notably, traditional finance giants, including BlackRock with its BUIDL fund, have shown increasing interest in tokenization throughout 2024.

LINK Breaks Out After Bullish Pattern

The price of LINK had been under pressure since March 11, declining from a yearly high of $22.87 to a low of $11.96 on April 13. This downturn saw LINK break below the $13 support area, which had held firm for 191 days. However, a long lower wick suggested buying interest, and the price quickly reclaimed this level.

In the subsequent month, LINK formed a triple bottom pattern, a bullish indicator, coupled with bullish divergences in the RSI and MACD. These signals culminated in a breakout from the 65-day descending resistance trend line on May 15. The breakout was further confirmed as the RSI moved above 50, and the MACD approached positive territory, indicating a potential trend reversal.

LINK Price Prediction: Will the Increase Continue?

Current price action and technical indicators point towards a bullish outlook. The most probable wave count suggests that LINK has completed an A-B-C corrective structure and is now poised for a new five-wave upward movement. A breakout from the short-term ascending parallel channel would confirm this bullish scenario.

However, there remains a bearish wave count possibility. This suggests that the recent surge could be part of a larger corrective wave, potentially leading to a decline toward $9 if LINK fails to break above the channel’s resistance trend line.

Reaction to $17 Resistance Will Be Key

As LINK nears the $17 resistance level, its response will be crucial in determining the next trend. A decisive breakout above this level would confirm the end of the correction and could propel LINK to new yearly highs. Conversely, failure to breach this resistance may result in a retracement, highlighting the significance of this pivotal juncture.

Chainlink’s recent price action reflects optimism following its strategic partnership with DTCC. Investors and analysts alike are watching closely to see if LINK can sustain this momentum and overcome the $17 hurdle, paving the way for further gains.

By Joadin Maina

Beyond the hype, I untangle the web3 revolution, guiding curious minds through the labyrinth of decentralized possibilities.