Chainlink skyrockets 51% as breakout targets $18

Key takeaways

• Chainlink rose 51% in seven days, with regulatory sentiment improving and project-specific developments occurring.
• By the end of August, Chainlink's total value secured had climbed to nearly $57 billion from $43 billion in June, a rise of about 33%.
• Through a partnership with Bottomline, payment infrastructure used by over 600 banks could be linked to multiple blockchains.

Over the last seven days, Chainlink's price has risen by about 51%, beating most of the crypto market after the SEC unveiled new regulatory proposals.

Improving network fundamentals and a number of major adoption announcements have also underpinned the rally.

From about $43 billion in June, Chainlink's total value secured reached nearly $57 billion by end-August. That 33% growth signals that a greater amount of value depends on Chainlink's services in DeFi and other blockchain areas.

LINK has additionally cleared a key technical resistance level, opening up a possible move towards $18 provided buyers stay in charge.

Total value secured by Chainlink approaches $57 billion

Since June, Chainlink's total value secured has made a steady recovery, gaining about $14 billion over two months.

TVS is a metric for the value of assets that Chainlink's services support or safeguard. An increase in TVS may point to rising demand for the network's oracles, cross-chain messaging, and asset verification.

The recovery bolsters the fundamental argument for LINK, demonstrating that network usage is rising in tandem with the token's price.

Still, TVS is not a measure of revenue or assets owned by Chainlink. It gauges the value reliant on its infrastructure, so it should be seen as a gauge of adoption.

If Chainlink continues to expand into institutional payments and tokenized assets, further growth could bolster LINK's long-term prospects.

A recent announcement revealed a partnership between Chainlink and Bottomline, a payment technology firm that handles SWIFT transfers for over 600 banks globally.

The aim of the collaboration is to link Bottomline's current offchain payment systems with several blockchain networks.

Banks and financial institutions that already use Bottomline could then engage with digital assets without needing to swap out their existing payment systems.

Chainlink's Cross-Chain Interoperability Protocol might serve as the communication layer that ties traditional finance to public and private blockchains.

Should the partnership succeed, it could boost Chainlink's importance as banks investigate stablecoins, tokenized deposits, and settlement via blockchain.

Chainlink was also chosen by the Wyoming Stable Token Commission to handle reserve verification for the state's Frontier Stable Token.

Wyoming will use Chainlink's Proof of Reserve as its sole onchain asset-verification system for the token. The system will publish verifiable data to show whether the stablecoin is fully backed by its reserve assets.

Proof-of-reserve infrastructure is crucial for stablecoins, as users require assurance that the number of tokens in circulation does not surpass the assets backing them.

The selection by Wyoming provides Chainlink with a government-level application and could reinforce its standing in the U.S. stablecoin market.

If other states or jurisdictions follow suit, demand for Chainlink's verification and interoperability products could rise.

LINK climbs above the 200-day EMA

In late August, LINK rose above its 200-day EMA, coinciding with a wider recovery across altcoins.

A sustained break above the 200-day EMA is frequently seen as a sign of improving long-term momentum. It means the current price has moved above its average over a substantial timeframe.

The breakout hints that LINK's prior bearish phase could be concluding. But confirmation will hinge on the token staying above the moving average during any future dips.

The RSI is at 64, indicating strong bullish momentum but not yet in the conventionally overbought zone above 70.

This leaves LINK with some space to continue its rally, though the quick 51% weekly advance raises the chance of short-term profit-taking.

LINK's rise above the $12 resistance confirmed a breakout from a bullish flag pattern that had been building since the August 21 rally.

A bullish flag forms when an asset consolidates following a sharp upward move. During this phase, early buyers take profits, and new buyers slowly step in expecting the next leg up.

A breakout above the flag's resistance indicates that buyers might have reclaimed control.

Based on the extent of LINK's prior rally, the technical pattern points to a target of about $18. That would be roughly 44% above the $12 breakout level.

To keep the bullish setup intact, LINK needs to stay above $12. A sharp fall back below the breakout level could signal a false move and postpone the anticipated rally.

Chainlink's improving fundamentals add further support to the technical picture. Increasing TVS, partnerships for institutional payments, and government adoption of stablecoins could help maintain demand beyond mere speculation.