Chainlink Shows Parabolic Signal After 28-Month Downtrend
The price of Chainlink (LINK) is currently at $7.60 and has been stuck in a range between $5 and $8 for over a year. However, there are signs of a potential rally as the cryptocurrency recently triggered an important signal known as the “parabolic SAR” after a lengthy downtrend lasting 28 months.
Chainlink’s Strong Performance During the Last Bear Market
Chainlink gained a reputation as a “blue chip” cryptocurrency during the previous bear market. While other major cryptocurrencies like Bitcoin and Ethereum remained bearish until the end of 2020, LINKUSD defied expectations by experiencing a nearly 10,000% increase leading up to the same timeframe.
Although Chainlink continued to rise by another 600% after the rest of the crypto market broke out in October 2020, it reached its peak at over $50 in May 2021. Since then, its performance has mostly been on a downward trend or sideways movement.
The Downtrend and Parabolic SAR Touch
After reaching its price peak, Chainlink experienced a significant rejection that drove its value down to $15 in the same month. This marked the beginning of the downtrend and also triggered the Parabolic SAR indicator, indicating that the uptrend had reversed.
The cryptocurrency spent 12 months in a steep downtrend followed by over 16 months of sideways movement. Overall, its value decreased by 90% from its peak to its current local bottom. Now that the Parabolic SAR has been touched once again, what can we expect next?
Potential for a 1,000% Rally
The Parabolic SAR is a technical analysis indicator created by J. Welles Wilder, Jr. It helps traders identify potential trend reversals. In the case of Chainlink, the Parabolic SAR may be accurately signaling a positive trend change after 28 months of downward movement.
Previous uptrends indicated by the 1M LINKUSD Parabolic SAR have been parabolic in nature. Each time the Parabolic SAR flipped bullish, Chainlink experienced a 1,000% gain. If this pattern continues, another 1,000% rally could push Chainlink’s price to over $80 per token. In the past, Chainlink has had three of these 1,000% rallies, so a 3,000% uptrend could potentially take the coin to over $230 each.
Additionally, the LMACD indicator is also crossing bullish for the first time in 28 months, adding further confirmation to the potential uptrend. With the Parabolic SAR now below the price, there is speculation that Chainlink may embark on another parabolic uptrend.
Hot Take: Chainlink’s Potential for a Strong Rally
The recent trigger of the Parabolic SAR and the crossing of the LMACD indicate that Chainlink may be on the verge of a significant rally. Previous patterns have shown that Chainlink has the potential for massive gains, with previous rallies reaching up to 1,000%. If history repeats itself, we could see Chainlink surpassing $80 per token and potentially even reaching over $230 each in a strong uptrend.
It’s important to keep an eye on these indicators and monitor Chainlink’s price movements closely to see if this potential rally materializes.
This chart initially appeared in Issue #22 of CoinChartist (VIP) alongside 30 other exclusive crypto charts. Subscribe for free.
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