- Chainlink breaks out with strong momentum.
- Historical correlation and the onset of altcoin season fuel the LINK bull market.
Chain link [LINK] Recently, it broke through the key resistance level at $10.6 on the 4-hours, resulting in an impressive return on investment of 18.58%.
The breakout was marked by strong momentum and is not expected to be retested anytime soon, suggesting potential strength in the price movement.
Source: Ola Wealth/X
However, challenges remain with the medium-term downtrend that has been ongoing since March. The next key resistance levels to watch are $13.1 and $16.8. The key question now is whether this strong rally can continue.
Weekly Outlook
Over the past week, LINK/BTC has shown resilience and risen towards the $12 price level. However, to maintain this momentum, LINK needs to break through the 2100 sats level.
If LINK can clear this hurdle, it may follow other DeFi projects and aim for the 4,400 sats level. The recent weekly liquidity surge further supports the upside potential.
Source: TradingView
Chain link [LINK] There is a clear weekly divergence between price action and the RSI and it looks like a mini-cycle has been completed.
This divergence indicates that the current rally could be the start of a new bull run for LINK. The fact that many altcoins are showing a similar pattern lends further confidence to the expected uptrend.
Source: TradingView
The coming Alto season
The altcoin market as a whole is showing signs of repeating patterns seen in 2017 and 2021, when altcoins saw strong rallies following halvings.
The altcoin market capitalization is currently in a stage of consolidation, similar to previous cycles that have often been preceded by significant rallies.
Source: TradingView
This suggests that altcoin season is approaching and could benefit not only LINK but other altcoins as well.
Historical Correlation
Chainlink’s correlation matrix shows strong relationships with major crypto assets: 0.95 with Bitcoin, 0.94 with Ethereum, 0.96 with Dogecoin, and 0.97 with Shiba Inu.
This means that any rise in these assets will likely be reflected in Chainlink. With the Federal Reserve expected to start cutting interest rates in mid-September and the US Dollar expected to weaken, this scenario could drive Chainlink’s price even higher.
Into the Block
Considering that the USD has a negative correlation of 0.09 with Chainlink and other crypto assets, a weaker dollar is likely bullish for LINK.
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The outlook for Chainlink appears bright as key resistance levels are being tested and it is highly correlated with other major crypto assets.
The upcoming altcoin season and a potential weakening of the US Dollar will provide further support to the continued upward trajectory of LINK’s price.
