Chainlink's LINK token has climbed approximately 51% over the past seven days, outperforming much of the cryptocurrency market following new regulatory proposals from the U.S. Securities and Exchange Commission (SEC). The rally has been reinforced by improving Chainlink network fundamentals and a series of significant adoption announcements, arriving amid a broader improvement in regulatory sentiment toward the sector.

The token has also broken above an important technical resistance level, creating a potential path toward $18 if buyers maintain control.

Total value secured approaches $57 billion

Chainlink's total value secured (TVS) has recovered steadily since June, rising from approximately $43 billion to nearly $57 billion by the end of August. The roughly $14 billion increase over two months represents growth of about 33%, indicating that more value is relying on Chainlink-powered services across decentralized finance and other blockchain applications.

TVS measures the value of assets supported or protected by Chainlink's services. A rising figure can signal growing demand for the network's oracle infrastructure, cross-chain communication tools, and asset-verification products. The recovery strengthens the fundamental case for LINK by showing that the network's usage is improving alongside its token price.

However, TVS does not represent revenue or assets directly owned by Chainlink. It measures the value dependent on its infrastructure and should therefore be viewed as an adoption indicator rather than a direct measure of earnings. Continued growth could support LINK's longer-term outlook, particularly if Chainlink expands further into institutional payments and tokenized assets.

Bottomline partnership targets bank payment rails

Chainlink recently announced a partnership with Bottomline, a payment technology company that facilitates SWIFT transfers for more than 600 banks worldwide. The collaboration is intended to connect Bottomline's existing offchain payment infrastructure with multiple blockchain networks, potentially allowing banks and financial institutions already using Bottomline to interact with digital assets without replacing their existing payment systems.

Chainlink's Cross-Chain Interoperability Protocol could provide the communication layer linking traditional financial infrastructure with public and private blockchains. If successful, the partnership could increase Chainlink's relevance as banks explore stablecoins, tokenized deposits, and blockchain-based settlement.

Wyoming selects Chainlink for stablecoin reserve verification

The Wyoming Stable Token Commission has also selected Chainlink to provide reserve verification for the state's Frontier Stable Token. Chainlink Proof of Reserve will serve as Wyoming's exclusive onchain asset-verification system for the token, publishing verifiable information showing whether the stablecoin is fully supported by its underlying reserve assets.

Proof-of-reserve infrastructure is particularly important for stablecoins because users need confidence that the number of tokens in circulation does not exceed the assets backing them. The Wyoming selection gives Chainlink a government-level use case and could strengthen its position in the U.S. stablecoin market. If other states or jurisdictions adopt similar systems, demand for Chainlink's verification and interoperability products could increase.

LINK breaks above the 200-day EMA

LINK moved above its 200-day exponential moving average (EMA) in late August, alongside a broader recovery among altcoins. A sustained move above the 200-day EMA is often interpreted as evidence of improving long-term momentum, indicating that the current price has risen above its average level over a significant period. The breakout suggests that LINK's previous bearish cycle may be ending, although confirmation will depend on the token holding above the moving average during future pullbacks.

The Relative Strength Index (RSI) stands at 64, showing strong bullish momentum without yet entering the conventionally overbought region above 70. This leaves LINK some room to extend its rally, although the rapid 51% weekly gain increases the possibility of short-term profit-taking.

LINK's move above the $12 resistance level confirmed a breakout from a bullish flag pattern that had been forming since the August 21 rally. A bullish flag develops when an asset consolidates after a strong upward move: early buyers take profits during this phase, while new buyers gradually enter in anticipation of the next advance. A breakout above the flag's resistance signals that buyers may have regained control.

Based on the size of LINK's preceding rally, the technical pattern projects a target of approximately $18, which would represent around 44% upside from the $12 breakout area. LINK must hold above $12 to preserve the bullish setup. A decisive drop back below the breakout level could indicate that the move was false and delay the projected rally.

Chainlink's strengthening fundamentals provide additional support for the technical outlook. Rising TVS, institutional payment partnerships, and government stablecoin adoption could help sustain demand beyond short-term speculation.

This article is based on reporting by CoinJournal.