LINK’s double-digit rally is backed by increasing network activity and a bullish technical setup.
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.
Bitcoin has more than doubled in price since the FTX collapse a year ago, but several other coins such as Chainlink have seen ever bigger gains since.
It's been a year since the demise of the FTX exchange — an event that's now increasingly looking like it was the Bitcoin (BTC), which is up roughly 120% from a year ago.
In November 2022, the FTX collapse wiped nearly $300 billion off the market cap, impacting several cryptocurrencies. The ones that suffered the most were tokens with deep financial ties to FTX, including Solana (SOL), Serum (SRM), and the exchange's own token, FTX Token (FTT).
But a year later, things have not only improved for BTC, but for most cryptocurrencies impacted by the FTX collapse.
Here are the top-gainers (from the top-30 by market capitalization) that would have yielded the biggest profit if bought in November 2022.
Solana's price plummeted by over 50% to $8 after the FTX collapse. The selloff occurred primarily because FTX and its sister firm, Alameda Research, held about 55 million SOL, triggering fears of a dump to plug liquidity holes.
Nonetheless, buying SOL a year ago would have produced a profit of over 660% today.
Solana's gains have largely stemmed from an overall upside sentiment in the crypto market, led by hopes about a Spot Bitcoin ETF approval in the U.S. At the same time, SOL's price has also benefited from subsiding fears about a potential dump by FTX.
#FTX
— Curb◎ (@CryptoCurb) November 14, 2023
FTX has sold 6,986,554 $SOL in the past few weeks, for ~$280.2M $USD.
They are completely OUT of unlocked $SOL.
The only $SOL they have exposure to is locked up, most until 2027-2028, just in time to sell the bottom of the next bear market.#SOLANA can commence UP ONLY. pic.twitter.com/Qu2z843oxS
OKX crypto exchange's token OKB was among the least-affected tokens by the FTX fiasco. Moreover, it has benefited greatly in terms of price after its top rival went bust.
Buying OKB at the FTX-led bottom of $17.20 a year ago would have yielded investors a 275% profit today.
OKB's price gains were Binance's loss, and its token BNB (BNB) has underperformed the market significantly as the exchange faces legal pressure in the United States.
BNB has underperformed many of the top-30 cryptos over the past year, up only 16% from the FTX-bottom.
Chainlink (LINK) had fallen by up to 40% following the FTX collapse. But its lower exposure to the crypto exchange, coupled with development updates, has resulted in a sharp price recovery since the event.
Notably, buying LINK in November 2022 at $5.68 would have produced over 180% profits today.
Factors that helped LINK price rally in recent months include the launch of a new proof-of-reserve product, growing adoption, and increasing demand among professional investors as suggested by Grayscale's Chainlink trust trading at a 170% premium to LINK's spot price.
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.
LINK's price could rally on speculations over Chainlink's oracle services growth coupled with a supportive technical pattern.
Chainlink (LINK) looks poised for 25% price rally in the days leading up to its staking protocol launch, based on several fundamental and technical facto.
The staking feature, which will go live as v0.1 in beta mode on Dec. 6, comes as a part of the so-called "Chainlink Economics 2.0" that focuses on boosting LINK holders' reward-earning opportunities for "helping increase the crypto economic security" of Chainlink's oracle services.
Earlier, Chainlink users had to launch their own nodes to receive rewards in LINK tokens. The staking feature effectively opens new avenues for them to earn LINK rewards that could, in theory, boost demand for the token.
Additionally, demand for LINK's parent platform Chainlink, as an oracle service provider, should also increase.
David Gokhshtein, the founder of blockchain-focused media company Gokhshtein Media, believes it could happen in the wake of the recent FTX collapse.
The analyst highlighted how traders have been seeking more clarity on exchanges' reserves after the FTX fiasco, which can boost demand for oracle services like Chainlink and, in turn, push LINK's price higher.
$LINK is definitely being overlooked. With everything that’s happened and with the new “Proof of Reserves” being pushed out there, ChainLink will be used to push that data out there.
— David Gokhshtein (@davidgokhshtein) November 26, 2022
Chainlink Labs launched its PoR auditing services to exchanges on Nov. 10.
The speculations have helped LINK price rally in recent days. Notably, Chainlink price gained 35.50% eight days after bottoming out locally at around $5.50 — trading for as much as $7.50 on Nov. 29, its highest level in two weeks.
The LINK/USD pair now eyes further upside in the near term, price technicals suggest.
LINK reclaimed its multi-week rising support trendline on Nov. 29, three weeks after losing it in the wake of the FTX-led market selloff.
In doing so, the Chainlink token also invalidated its prevailing ascending triangle breakdown setup toward $4.
It now trades inside the pattern's range, eyeing a rally toward the upper trendline near $9.40, up 25% from the current price levels, by the second week of December, as shown below.
Michaël van de Poppe, market analyst and founder of Eight Global, also anticipates LINK to hit or cross above $9
#Chainlink showing a ton of strength, also expecting continuation there to happen.
— Michaël van de Poppe (@CryptoMichNL) November 29, 2022
If I didn't have a long yet (but I do), then I'd be targeting for something like this in which I'd be looking at $9 area for a TP. pic.twitter.com/rRdv4eL91H
Moreover, a bullish continuation move above the $9.40 resistance could have LINK eye $16 next, the ascending triangle breakout target.
Related: Binance publishes official Merkle Tree-based proof of reserves
Conversely, slipping below the triangle's lower trendline again risks bringing the breakdown setup toward $4 back in play, down about 45% from current prices.
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.
LINK could drop to nearly $4 by December 2022 given its failure to close above a key resistance level despite strong whale accumulation.
Chainlink (LINK) returned to mimic the broader crypto market downtrend as its price fell alongside top coins Bitcoin (BTC) and Ether (ETH) on Nov. 8.
LINK plunged by as much as 10% into the day to reach $8. While BTC and ETH slipped by approximately 6.5% and 9%. That contrasts with the trend witnessed on Nov. 7, wherein LINK rallied 14% to $9.25, its three-month high, while BTC and ETH dropped 1.5% and 0.5%, respectively.
Overall, on a week-to-date timeframe, Chainlink has outperformed both Bitcoin and Ethereum.
LINK's price has rebounded by nearly 75% after bottoming out at $5.29 in May. Notably, the Chainlink token's recovery rally has coincided with a persistent increase in the supply held by its whales (entities that hold at least 1,000 LINK).
The Chainlink supply percentage held by addresses with a balance between 1,000 LINK and 1 million LINK has risen to nearly 23% in November from 18.2% in May, according to Santiment data. This indicates that rich investors may have been the key players behind the LINK price recovery.
Interestingly, the LINK accumulation trend is rising in the days leading up to the launch of "Chainlink Staking."
Chainlink Co-founder Sergey Nazarov announced at SmartCon 2022 that their long-awaited LINK staking reward function would go live in December. In addition, the project's official website confirms that it would enable "eligible community members" to stake LINK into its pool in December.
The LINK staking service will be opened for the public in the same month, with the initial annual percentage yield set at 5%. The event has started drawing speculations about increased demand for the Chainlink tokens by the end of 2022.
LINK appears to have benefited in the short-term due to the euphoria around the Chainlink Staking function, given other coins have tumbled in unison in response to the crypto hedge fund Alameda Research's insolvency rumors.
#Chainlink spiked all the way above $9.20 for the first time since August 13th, a ~3 month high despite very volatile markets. This rise has been supported by the largest amount of active $LINK addresses in 5 weeks, and traders are longing aggressively. https://t.co/ZxsZnveURm pic.twitter.com/lia6XAgSar
— Santiment (@santimentfeed) November 8, 2022
From a technical perspective, LINK's recovery rally since May has been confined inside an ascending triangle range.
Related: Bitcoin heads to US midterms as research says dollar ‘closing in’ on a market top
Ascending Triangles are continuation patterns, meaning they typically send the price in the direction of its previous trend after a consolidation period. LINK was trending downward before it formed its ascending triangle.
The token's likelihood of continuing its downtrend and reaching its profit target stands at 44%, per the observation of ascending triangles by veteran investor Thomas Bulkowski. The profit target is measured after adding the maximum triangle height to its breakdown point, as illustrated below.
That puts LINK en route to around $4.15 by December 2022, down about 50% from today's price.
Conversely, independent market analyst Pentoshi anticipates LINK to reach $12 in the same period, given the token has been floating above the same support that was instrumental in sending its price to a record high in May 2021.
"While people are quiet on it now. I don't think that will be the case 3-4 weeks from now," Pentoshi said.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
The price of LINK also surged in the wake of a marketwide bullish boom, wherein Bitcoin and its top rivaling altcoins jumped in tandem.
Chainlink emerged as one of the best cryptocurrency performers on Sept. 6 as the price of its LINK token jumped 8.25% against the U.S. dollar.
The LINK/USD exchange rate reached $36.35 for the first time since May 20, months after bottoming out near $13.45 — thus recovering by more than 170% altogether. At the same time, its recent bout of buying saw prices bringing in about 36% month-to-date returns.
Optimism Ethereum announced on Sept. 1 that it had integrated Chainlink's market-leading decentralized oracle solutions to its Ethereum layer-two services. As a result, LINK — which serves as a payment and staking token inside the Chainlink ecosystem — rose by 36% on the prospects of seeing higher interim demand from Chainlink users.
The same fundamentals previously assisted LINK investors in closing 2020 at a 540% profit.
A booming decentralized finance (DeFi) space and its dependency on Chainlink to secure live data feeds pushed demand for LINK higher among users and speculators alike. As a result, Chainlink's market share in the DeFi reached 80% at one point in time, reported ZDNet.
LINK continued its climb in the first quarter of 2021, surging 161%, but followed the upside boom with a disappointing second quarter after falling 37%. Its losses came in the wake of an overall correction trend across top cryptocurrency tokens, including Bitcoin (BTC) and Ether (ETH).
Yuriy Mazur, head of data analytics at crypto exchange CEX.IO, said LINK could climb above $50 in the coming three weeks. The analyst cited Chainlink's partnership with over 76 new projects in August as one of the primary bullish indicators for its native token.
He told Cointelegraph:
"This relevance has perhaps boosted LINK accumulation to access the Chainlink offerings. As a result, spot traders appear ambitious to stir the price growth until LINK/USD retests the previous all-time high of $52."
But for Stephen Tuttle, a financial analyst at Seeking Alpha, the next big upside target for Chainlink's token sits near $65.
Tuttle noted that traders have allocated all their attention to Ether due to its principal involvement in the booming nonfungible token (NFT) space. As a result, he anticipated a capital reallocation after the ETH price rally tops out, which would be extremely beneficial to the LINK market.
"If Chainlink can once again reach 0.02 Eth per Link, at Ethereum's current price, this would place the Link token at about $65, or a 2.6x increase from its current price of $25."
At the time of writing, the LINK/ETH rate was 0.009 ETH.
LINK's latest price rally also surfaced in the wake of an overall crypto boom, with Bitcoin retaking $51,000 and Ether rising toward $4,000. Crypto traders raised their bids across the board, anticipating that the Federal Reserve would delay its taper plans after two disappointing U.S. jobs reports last week.
Related: Chainlink (LINK) looks for momentum while pro traders target $40
As a result, LINK's market bias remains highly correlated to top coins. Atop that, there are hints that the token is seeing the formation of a bearish reversal indicator, as highlighted in the chart below.
Dubbed an "ascending broadening wedge," the indicator showcases two rising bullish trendlines that deviate from one another. The pattern does not warrant buying exhaustion but points to sellers' ambition to take over each time the price touches the upper trendline.
As a result, LINK/USD still holds the potential of undergoing a large pullback toward the lower wedge trendline (around $28). Nonetheless, bears would need to close below $37.96, the 50% Fibonacci level of the Fibonacci retracement graph drawn from the $52.32 swing high and $13.61 swing low.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
LINK price is struggling to maintain its bullish momentum but derivatives data shows a clear path to $40 in the long term.
Chainlink (LINK) is the leading oracle provider, and the project has onboarded over 281 crypto projects in 2021. Some of these include heavyweights like Huobi's ECO Chain, the Hedera Governing Council, and Alchemix.
Launched in Oct. 2020, Chainlink's verifiable randomness function, or VRF, has also gained notoriety among decentralized applications (dApps). VRF provides an automated source of randomness to ensure prizes and rewards are issued in a verifiably fair fashion.
For example, on Aug. 13, Arbitrum — a layer-two Ethereum scaling solution — launched a beta mainnet service integrated with Chainlink's oracle data feed and intends to add a "Proof of Reserve" service allowing collateralized assets to be audited using the oracle provider's web API.
Chainlink offers a secure connection between smart contracts and off-chain data and services, servicing decentralized finance (DeFi) applications, social networks, NFT platforms and interoperability projects.
Among Chainlink's major differentials are the node operators, and Swisscom, a Switzerland-based telecommunications company, chose the project for a pilot program on Aug. 5. The company is 51% owned by the Swiss government, and the telecom operator currently has more than 19,000 employees and 6 million subscribers.
On Aug. 10, Bancor, an Ethereum-based decentralized exchange (DEX) and liquidity provider, announced that its upcoming version would integrate Chainlink Keepers to work as external triggers for smart contracts. This tool simplifies the staking experience for liquidity providers and automates advanced trading features.
Bancor holds over $1.5 billion worth of various cryptocurrencies locked in its smart contracts, and this illustrates how Chainlink's oracle solutions have been forming a critical backbone to the dApps industry.
LINK is a crowd favorite, but after retracing 12% from the $30.50 top on Aug. 16, investors have reason to question if the bull trend has come to an end. Fortunately, for bullish investors, derivatives data is signaling that LINK could push to $40 or higher.
Related: The crypto effect: Trading altcoins at the edge of addiction
Let's take a look at LINK's derivatives data to assess how traders are dealing with the 14% price correction since the $30.50 top in mid-Aug.
Standing at $260 million, LINK futures' open interest might seem small compared to the $1 billion-plus held by Ether (ETH), Cardano (ADA), and XRP. The number is relevant considering its $560 million average daily spot exchange volume, but this is also 65% below larger market-cap altcoins according to Nomics' transparent volume.
Perpetual contracts, also known as inverse swaps, have an embedded rate usually charged every eight hours. This fee ensures there are no exchange risk imbalances. A positive funding rate indicates that longs (buyers) are the ones demanding more leverage.
However, the opposite situation occurs when shorts (sellers) require additional leverage, and this causes the funding rate to turn negative.
As depicted above, the 8-hour fee reached an 0.07% average between Aug. 20 and Aug. 24, which is equivalent to 6.2% per month. This momentary spike rapidly seized as the LINK price crashed below $27 and signaled a well-balanced situation between the leverage used by longs and shorts.
Some analysts might interpret this data as neutral-to-bearish, but the absence of a high futures open interest and a neutral leverage situation is a healthy indicator. This is especially true considering that LINK has rallied 94% since its $13.40 low on July 20.
Consequently, derivatives markets signal a healthy recovery and no impediments for continuing the bullish momentum above $40.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
