Chainlink Price Prediction: LINK Tags Key Support at $22 – Can It Stay Afloat?

Chainlink (LINK) had a fakeout recently after failing to break above the $27 mark during the latest bull run.

The selling pressure exploded as the token hit a key weekly trend line resistance, and went on to drop days after.

Now, LINK has tagged a relevant area of support that previously acted as resistance, and, depending on what happens next, such a move could provide a hint of where the token will be heading next.

In the past 24 hours, LINK’s trading volumes have gone up by 16%, accounting for 6% of the token’s circulating supply at $918 million.

Its performance this year has been far from stellar as it has delivered year-to-date (YTD) gains of 12.3%. Comparatively, top altcoins like XRP (XRP) and Ethereum (ETH) have produced higher returns of 35% and 30%, respectively.

Altcoin season has started, but the top tokens in this category seem to be the ones getting the most attention from market participants.

Chainlink’s On-Chain Metrics Keep Reaching New Records

Meanwhile, some project-specific developments are quite interesting and support a bullish long-term Chainlink price prediction. For example, the head of this project, Sergey Nazarov, will be giving a speech at the Federal Reserve’s next Payments Innovation Conference.

The fact that he will be the first lecturer after the event is inaugurated has been interpreted by the community as a strong pat on the back from the central bank to the crypto world.

Chainlink’s Total Value Secured (TVS) – Source: Chainlink’s Official Website

In September this year, Chainlink’s total value secured (TVL), a key metric of the total value of the assets deposited within the smart contracts that its solutions secure, reached a new all-time high at $101.5 billion.

This highlights how the project has been advancing toward its goal of becoming the go-to provider of price feeds and oracles for the development of the real-world assets (RWAs) market of the crypto industry.

The tokenization of RWAs has been progressing in the United States with the help of Wall Street titans like BlackRock, whose BUIDL fund already manages over $2 billion in assets.

Chainlink benefits from this trend, and its native asset could perform positively in the near term as this market continues to grow.

Weekly Chart Shows Two Potential Scenarios for LINK

From a technical standpoint, the weekly chart shows that LINK has hit a key support at $22, from which the token needs to bounce if bulls want to keep this rally going.

LINK/USD Weekly Chart (Coinbase) – Source: TradingView

A bearish breakout below this mark could push LINK down to $16 first and then $10 if negative momentum gains traction. This means a catastrophic 50% downside risk.

The latest failed breakout of LINK’s long-standing trend line resistance was not good news, as it increases the odds of a much deeper correction.

On the other hand, if the token bounces from this demand zone, we could get a strong rally toward $37 first and then to much higher levels if bullish momentum accelerates.

The Relative Strength Index (RSI) in the weekly time frame is still on an uptrend and has managed to stay above the mid-line. Nonetheless, the oscillator has dropped below the 14-period moving average – a sell signal.

If the downtrend continues, all technical indicators will favor a bearish outcome. Will this be the end of the rally? Not necessarily, but it will be a major setback for bulls.