Chainlink (LINK), the 14th largest cryptocurrency by market value, is demonstrating resilience in the face of widespread sell-offs that are shaking the crypto market. While Bitcoin (BTC) has dropped below $41,000 and many major altcoins have experienced sharp pullbacks, LINK has managed to sustain a price above $14.2. The primary reason for LINK’s robust performance is attributed to a bullish chart pattern known as the “inverse head and shoulders” (IHS), which could potentially propel LINK’s price to $20.
Amidst the negative trend that began after the launch of a Spot Bitcoin ETF, LINK’s price has been moving horizontally for the last two months, signaling market indecision. On the daily chart, LINK is seen trading between two trend lines of a well-known pattern called the “expanding channel,” which guides the price movement between the lines before a definitive breakout.
Recently, LINK surged by 30% to $16.39 on January 8, followed by a retracement to the pattern’s lower trend line. Despite the ongoing sell-offs in the market, LINK’s price is currently holding above the $14.2 level, showcasing its strength.
On-chain data monitored by IntoTheBlock indicates a significant trend for LINK, where a whale investor took advantage of a partial price dip to purchase 601,949 LINK at an average price of $14.81, amounting to $8.9 million. This substantial acquisition and the subsequent distribution of LINKs to three new wallet addresses signify strong confidence in the altcoin.
With renewed buying interest, LINK’s price is exhibiting strength through the development of the IHS formation. The altcoin, currently trading at $15.2, needs to break above the $16.2 neckline resistance. A potential breakout could support a sustained rally of up to 15%, aiming for the $18.5 resistance of the parallel channel formation. A confirmed uptrend requires a break above this barrier, and a successful breakout could lead to LINK rising to $20 and beyond. Moreover, LINK’s price above the 100-day EMA and a bullish crossover in the MACD indicate an underlying uptrend.