Red Pill

Chainlink

Chainlink (<a href="https://cointelegraph.com/chainlink-price-index" rel="noopener noreferrer nofollow">LINK</a>) price gained 7% on May 24, despite a downturn in the wider cryptocurrency market.&nbsp;
Currently priced at $17.04, LINK has seen an impressive 30% increase so far in May, prompting investors to wonder whether the drivers for a rally above $20 still exist.
<figure><img src="https://s3.cointelegraph.com/uploads/2024-05/41825e08-d26e-4646-b3c7-01d8540af45e.png">
 <figcaption style="text-align: center;">LINK/USD daily chart. Source: <a href="https://www.tradingview.com/x/zCgWRkMK/" target="_blank" rel="noopener noreferrer nofollow">TradingView</a>
 </figcaption>
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Let’s look at the factors that could possibly drive LINK price higher.
<h2 id="on-chain-metrics-reveal-positive-sentiment-for-link-price">On-chain metrics reveal positive sentiment for LINK price</h2>
According to a May 24 X <a href="https://x.com/santimentfeed/status/1793863195788267961" target="_blank" rel="noopener noreferrer nofollow">post</a> by market intelligence firm Santiment, on-chain metrics are painting a bullish picture for LINK, with the price notably outperforming other cryptocurrencies, reaching a six-week high of $17.50 on May 24.
The data reveals that LINK’s ratio of profitable transactions to loss-making ones stands at 11 to 1, representing the most favorable ratio since Dec. 8, 2022.
<blockquote>
 “Chainlink decouples from markets and hits a 6-week high with profit level at the highest level in 17 months.”
</blockquote>
<figure><img src="https://s3.cointelegraph.com/uploads/2024-05/49d4f2c2-0885-4b44-a1e2-813430505fa8.png">
 <figcaption style="text-align: center;">Chainlink ratio on-chain transactions. Source: <a href="https://x.com/santimentfeed/status/1793863195788267961" target="_blank" rel="noopener noreferrer nofollow">Santiment</a>
 </figcaption>
</figure>
Additional data from Santiment reveals that activity on the <a href="https://cointelegraph.com/learn/what-is-chainlink-a-beginners-guide-to-the-cross-chain-interoperability-protocol" rel="noopener noreferrer nofollow">Chainlink</a> network has been increasing since mid-May. The chart below shows that the number of <a href="https://cointelegraph.com/learn/active-vs-new-addresses-in-crypto-key-differences-explained" rel="noopener noreferrer nofollow">daily active addresses</a> engaging with the Chainlink blockchain has increased from 3,159 on May 14 to $11,304 on May 22. Meanwhile, development activity has jumped from 421 unique GitHub repositories in mid-April to the current value of 436.
<figure><img src="https://s3.cointelegraph.com/uploads/2024-05/727143da-3c3a-41d6-b25a-5c70ce6c95ab.png">
 <figcaption style="text-align: center;">Chainlink on-chain activity. Source: Santiment
 </figcaption>
</figure>
In a May 22 post on X, Santiment listed Chainlink as the network with the most “notable daily development activity rates over the past 30 days” among “top #ERC-20 related coins.”
<blockquote>
 “Chainlink, Status and Ethereum are the top developed ERC-20s in crypto are traders anticipate new ETF.”
</blockquote>
<figure><img src="https://s3.cointelegraph.com/uploads/2024-05/9f333340-2486-4350-a4a5-76805f94f031.png">
 <figcaption style="text-align: center;">Top 10 developed crypto projects sorted by ERC-20s. Source: <a href="https://x.com/santimentfeed/status/1793309936623161370" target="_blank" rel="noopener noreferrer nofollow">Santiment</a>
 </figcaption>
</figure>
Increasing network activity illustrates that more people are using the Chainlink blockchain, which implies a higher demand and value for LINK.
<h2 id="a-strong-technical-setup-backs-link-price">A strong technical setup backs LINK price</h2>
Data from <a href="https://subscription.cointelegraph.com/" rel="noopener noreferrer nofollow">Cointelegraph Markets Pro</a> and <a href="https://www.tradingview.com/symbols/BTCUSD/" target="_blank" rel="noopener noreferrer nofollow">TradingView</a> shows that the LINK price bounced off a horizontal support line of a descending triangle at $13 on May 15, rising 36% to set a six-week high at $17.50 on May 24.
This uptrend saw the price escape from the bearish triangle and flip key resistance levels into support, including the barrier at $15, embraced by both the 50-day and 200-day exponential moving averages (EMAs) and the 100-day EMA currently at $16. These moving averages provide areas of strong support for LINK on the downside.
In addition, the relative strength index (RSI) has risen from 36 to 65 over the same period. This suggests that the buyers have taken control of the price, reinforcing the strength of the uptrend.
<figure><img src="https://s3.cointelegraph.com/uploads/2024-05/7ea8ea1e-eeb8-4b17-88e8-7c9b22eb060a.png">
 <figcaption style="text-align: center;">LINK/USD daily chart. Source: <a href="https://www.tradingview.com/x/zCgWRkMK/" target="_blank" rel="noopener noreferrer nofollow">TradingView</a>
 </figcaption>
</figure>
Moreover, the In/Out of the Money Around Price (IOMAP) model from IntoTheBlock revealed that LINK enjoyed relatively strong support on the downside compared to the resistance it faced on the upside.
<figure><img src="https://s3.cointelegraph.com/uploads/2024-05/e3a7c171-443b-4c38-8b82-f44da6c09c3e.png">
 <figcaption style="text-align: center;">Chainlink IOMAP chart. Source: IntoTheBlock
 </figcaption>
</figure>
This implied that the path with the least resistance for LINK was on the upside.
Related: <a href="https://cointelegraph.com/news/chainlink-link-hits-1-year-price-high-above-20-here-s-what-to-expect-next" rel="noopener noreferrer nofollow">Chainlink (LINK) hits 1-year price high above $20</a>
<h2 id="traders-expect-more-upside-for-link-price">Traders expect more upside for LINK price</h2>
Independent trader Crypto Yapper acknowledged LINK’s breakout from a bearish triangle, as illustrated earlier, saying that the price “looks bullish.” Yapper <a href="https://x.com/CryptoYapper/status/1793969946860646516" target="_blank" rel="noopener noreferrer nofollow">said</a> this in a May 24 post on the X social platform, adding that the price was fighting resistance at $17.5,0, which if broken, will be turned into support.
<blockquote>
 “If we confirm the breakout, we can expect a retest to turn this resistance into support.”
</blockquote>
Fellow trader Mister Crypto <a href="https://x.com/misterrcrypto/status/1793693625567564058" target="_blank" rel="noopener noreferrer nofollow">expressed</a> confidence in Chainlink’s future price performance, stating that LINK will easily surpass the $50 mark once again during this bull run.
<figure><img src="https://s3.cointelegraph.com/uploads/2024-05/0793d711-1aa5-4d97-a5bc-dd366eb35a0a.jpeg">
 <figcaption style="text-align: center;">LINK/USD 2-week chart. Source: <a href="https://x.com/misterrcrypto/status/1793693625567564058" target="_blank" rel="noopener noreferrer nofollow">Mister Crypto</a>
 </figcaption>
</figure>
Another X user Chainlink Red Pill <a href="https://x.com/ChainlinkP/status/1793863125831401859" target="_blank" rel="noopener noreferrer nofollow">believes</a> LINK is “vastly underpriced,” considering its fundamental value proposition.
“Chainlink is going to make tokenization incredibly profitable for the biggest financial entities in the world,” they said, urging their over 17,000 flowers to recognize the opportunity that lies ahead with LINK as it could multiply as much as 100X from the current levels.
<blockquote>
 “I really won't be surprised when it 50-100x’s from here. Most will.”
</blockquote>
This sentiment reflects the growing optimism surrounding Chainlink’s fundamental value and its potential to drive significant growth in the cryptocurrency market.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Chainlink price hits 6-week high, is $20 LINK the next stop?

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