Chainlink eyes $30 breakout as Bitwise files to launch LINK ETF

• Chainlink defends $22.00 support following Monday's flash drop.
• Bitwise has filed with the SEC to launch a Chainlink ETF
• Coinbase Custody Trust Company will provide custody services for the ETF tracking the LINK price.

Chainlink (LINK) price extends recovery following three consecutive days of declines. The oracle network token is up over 2% to exchange hands above $23.00 on Tuesday, buoyed by positive sentiment after digital asset manager, Bitwise, filed to launch a LINK spot Exchange Traded Fund (ETF).

Bitwise files to launch LINK ETF

Bitwise has filed with the United States Securities and Exchange Commission (SEC), seeking approval to offer a LINK ETF. An ETF is a regulated financial product tracking the price of an underlying asset and is accessible directly on stock exchanges like NASDAQ.

According to the S-1 Form, Bitwise intends to track LINK's value, with Coinbase Custody Trust Company providing custody services. If approved, Coinbase will serve as the prime execution agent. Details of the exact listing venue remain unknown, although Bitwise expects the shares to list on a US exchange.

The filing adds that it will offer standard creation and redemption to ensure customers have access to both in-kind and cash transactions supported by a Trust-Directed-Trade process executed by Coinbase.

Bitwise's application adds to the industry-wide push for the adoption of digital assets in traditional finance systems. The SEC, under its 'Crypto Project,' is working to establish clear regulations for the crypto industry, which will support innovation, inclusivity and ensure customer protection.

Meanwhile, interest in Chainlink has fallen over the last few days, according to CoinGlass derivatives data. LINK's Open Interest (OI), representing the value of outstanding futures or options contracts, averages at $1.6 billion, down from $1.8 billion. 

Chainlink Futures Open Interest | Source: CoinGlass

The decline implies weak market sentiment and reduced trading activity. Upholding the downtrend could hinder Chainlink's recovery, which is aiming for a breakout above $30.00.

Technical outlook: Upholds key support level

Chainlink price is trading above $23.00 after a knee-jerk bounce from support at $22.00. Its technical picture on the daily chart affirms the short-term bearish outlook, underpinned by the Moving Average Convergence Divergence (MACD) indicator's sell signal.

Should investors reduce exposure citing the MACD line crossing below the red signal line, the decline could extend to test the 50-day Exponential Moving Average (EMA) support at $20.40. The 100-day EMA at $18.28 and the 200-day EMA at $17.10 will serve as tentative support levels if headwinds overwhelm demand.

LINK/USDT daily chart

The Relative Strength Index (RSI) holds above the midline while stabilizing at 54. A continued correction toward overbought territory above 70 would reinforce the bullish grip, paving the way for the $30.00-bound breakout.

A buy signal flaunted by the SuperTrend indicator backs Chainlink's short-term bullish outlook. This trend-following tool functions as dynamic support as long as it trails the LINK price, suggesting that sentiment remains bullish despite price fluctuations.