Chainlink (LINK) price gained 7% on May 24, despite a downturn in the wider cryptocurrency market. 

Currently priced at $17.04, LINK has seen an impressive 30% increase so far in May, prompting investors to wonder whether the drivers for a rally above $20 still exist.

Let’s look at the factors that could possibly drive LINK price higher.

On-chain metrics reveal positive sentiment for LINK price

According to a May 24 X post by market intelligence firm Santiment, on-chain metrics are painting a bullish picture for LINK, with the price notably outperforming other cryptocurrencies, reaching a six-week high of $17.50 on May 24.

The data reveals that LINK’s ratio of profitable transactions to loss-making ones stands at 11 to 1, representing the most favorable ratio since Dec. 8, 2022.

“Chainlink decouples from markets and hits a 6-week high with profit level at the highest level in 17 months.”

Additional data from Santiment reveals that activity on the Chainlink network has been increasing since mid-May. The chart below shows that the number of daily active addresses engaging with the Chainlink blockchain has increased from 3,159 on May 14 to $11,304 on May 22. Meanwhile, development activity has jumped from 421 unique GitHub repositories in mid-April to the current value of 436.

In a May 22 post on X, Santiment listed Chainlink as the network with the most “notable daily development activity rates over the past 30 days” among “top #ERC-20 related coins.”

“Chainlink, Status and Ethereum are the top developed ERC-20s in crypto are traders anticipate new ETF.”

Increasing network activity illustrates that more people are using the Chainlink blockchain, which implies a higher demand and value for LINK.

A strong technical setup backs LINK price

Data from Cointelegraph Markets Pro and TradingView shows that the LINK price bounced off a horizontal support line of a descending triangle at $13 on May 15, rising 36% to set a six-week high at $17.50 on May 24.

This uptrend saw the price escape from the bearish triangle and flip key resistance levels into support, including the barrier at $15, embraced by both the 50-day and 200-day exponential moving averages (EMAs) and the 100-day EMA currently at $16. These moving averages provide areas of strong support for LINK on the downside.

In addition, the relative strength index (RSI) has risen from 36 to 65 over the same period. This suggests that the buyers have taken control of the price, reinforcing the strength of the uptrend.

Moreover, the In/Out of the Money Around Price (IOMAP) model from IntoTheBlock revealed that LINK enjoyed relatively strong support on the downside compared to the resistance it faced on the upside.

This implied that the path with the least resistance for LINK was on the upside.

Related: Chainlink (LINK) hits 1-year price high above $20

Traders expect more upside for LINK price

Independent trader Crypto Yapper acknowledged LINK’s breakout from a bearish triangle, as illustrated earlier, saying that the price “looks bullish.” Yapper said this in a May 24 post on the X social platform, adding that the price was fighting resistance at $17.5,0, which if broken, will be turned into support.

“If we confirm the breakout, we can expect a retest to turn this resistance into support.”

Fellow trader Mister Crypto expressed confidence in Chainlink’s future price performance, stating that LINK will easily surpass the $50 mark once again during this bull run.

Another X user Chainlink Red Pill believes LINK is “vastly underpriced,” considering its fundamental value proposition.

“Chainlink is going to make tokenization incredibly profitable for the biggest financial entities in the world,” they said, urging their over 17,000 flowers to recognize the opportunity that lies ahead with LINK as it could multiply as much as 100X from the current levels.

“I really won't be surprised when it 50-100x’s from here. Most will.”

This sentiment reflects the growing optimism surrounding Chainlink’s fundamental value and its potential to drive significant growth in the cryptocurrency market.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.