Chainlink (LINK) is trading at around $9 as the social engagements have blown up to over 480 million since the past year, and 82% positive sentiment. The massive explosion on social media has been driven by three factors: Grayscale’s Chainlink ETF (GLNK) being listed on NYSE Arca, Mastercard connecting its cards via Chainlink, and Coinbase routing its order book and perps data on Chainlink. Although the shorter time frame shows that LINK is overbought, the higher time frames suggest there is room for improvement.
LINK is overbought on short time frame chart
Chainlink is currently trading at $9 and is almost on the verge of crossing over to the overbought region, despite social media engagement rising drastically. On the 4-hour chart, LINK, which is trading inside a symmetrical triangle pattern, should technically be testing the upper trendline of the pattern, which is above $9.
However, the Relative Strength Index, which gauges the price of the token, says that it is overvalued. As per natural market reaction, the token could go through a correction, and it might not make a new lower high as it has been during the past days.
According to the market intelligence tool Lunar Crush, the excitement and the hype in social engagement come from three incidents.
ETFs, integrations with LINK is the talk of the town
The listing of the Grayscale investments’ Chainlink ETF (GLNK) on NYSE Arca is quite significant since it helps bridge the gap between altcoins and traditional finance, considering the reported $41M worth of inflows on day one. This ETF will help investors be exposed to the price action of Chainlink without necessarily having to hold any position in the asset, thus helping bring more institutional money, which would normally stay away from crypto exchanges. This is significant since ETF inflows mean actual demand while supply is locked in the fund.
It becomes clear when Mastercard integrates its over 3.5 billion card network into DeFi using Chainlink. The integration will mean card users will be able to swap their fiat currencies for cryptos on platforms such as Uniswap, hence reducing the barrier between fiat and DeFi worlds.
Lastly, the Coinbase order book and perpetual futures market data will be integrated on-chain via Chainlink DataLink. This means the data about the trading and order book information for derivatives on Coinbase can finally be used by decentralized protocols directly on-chain without the need for any intermediaries.
Although the 4-hour chart shows that the price is overbought. The higher time frame, like the weekly chart, shows that there is more upside for LINK. As shown in the chart below, LINK is trading inside a broadening wedge.
The expanding wedge formation is an indication of rising market volatility with greater disagreements from both buyers and sellers. Unlike the symmetrical triangle pattern, prices do not converge but rather move farther apart, creating new highs and new lows. This means that there is increased aggression on the part of both bulls and bears, with bulls driving prices to new highs and bears selling strongly at new lows.
Now that LINK is sitting on the lower trendline of the expanding wedge, it should rebound and head towards the upper trendline, which is above $25. Unlike on the 4-hour chart, the RSI indicator on the weekly chart shows that the market is neutral and there is more space for the prices to appreciate.
