Chainlink Price Prediction: LINK market dominance takes a hit but is there a Hail Mary?


Share:
  • Chainlink price heads into regions of higher seller congestion likely to delay recovery.
  • Some LINK whales are increasing their holdings, suggesting a turnaround in the price.
  • If the bull flag pattern confirms, there is a chance a breakout could set LINK on a recovery path.

Chainlink has, in less than two days, lost ground to three cryptocurrencies (Polkadot, Bitcoin Cash, and Binance Coin) as far as market capitalization is concerned. Prior, LINK rallied in tandem with the decentralized finance (DeFi) craze to the extent of attaining the top five status after displacing Bitcoin Cash. The surging market cap happened as the prices soared to new all-time highs at $20.

Top ten cryptocurrencies by market capitalization 

Crypto ranking by market cap

Unfortunately, September has not been kind to the smart contracts oracle token. In addition to the price dropping below $10, LINK has also witnessed an alarming market dominance decrease. From the fifth-largest digital asset in the market, Chainlink is barely holding the eighth position with a market cap of $3.8 billion. So, the question is, why is LINK spiraling? Is there hope for reversal both for the price (currently trading at $10.97) and market capitalization?

Crypto.com adopts Chainlink’s oracles for DeFi wallet

Despite Chainlink’s challenges to sustain the uptrend and market dominance, the protocol is still the most preferred provider of decentralized price oracles. Crypto.com is the latest DeFi project to tap into the live price feed oracles from Chainlink. The integration comes after the Hong Kong-based crypto exchange announced the launch of its DeFiSwap – a Uniswap as well as an automated market maker. Additionally, Crypto.com will tap into Chainlink’s famed price feeds for its native digital currency, CRO.

Chainlink awaits possible bull flag pattern breakout

Generally, LINK is bearish, especially when short timeframes are taken into account. The Relative Strength Index (RSI) has slipped below the midline and seems to be nurturing a leveling motion at 40. If the RSI trend remains sideways, we can expect Chainlink to commence a period of consolidation ahead of a reversal.

The price has also been trading within a descending channel since the rejection at 20. Although this channel highlights a continuing bearish trend, it can also be interpreted as a bull flag pattern. Flag patterns are used in technical analysis to signal the continuation of the trend preceding them. In this case, the bull flag illustrates that LINK could soon resume the uptrend for highs towards $20. Moreover, the wide gap left by the 50 SMA above the 200 SMA in the daily range hints buying pressure is still present, and perhaps if bulls increase their positions, they could once again regain control of the price.

LINK/USD daily chart

LINK/USD price chart

Chainlink on-chain analysis

According to IntoTheBlock’s IOMAP, LINK is heading into a region of increasing seller congestion. The first two resistances at $10.78 - $11.08 and $11.08 - $11.41 could easily give way due to the low volume of coins previously purchased. Unfortunately, the region between $11.41 and $12.38 has the highest congestion of selling pressure, likely continue to delaying Chainlink’s recovery mission.

Chainlink IOMAP chart

LINK IOMAP by Intotheblock

In other words, the path of least resistance seems downwards, especially if the first support at $10.43 - $10.76 gives up. Previously, 462 addresses bought 2.24 million LINK. If this support is broken, LINK/USD could end up in a devastating slide to $9.46 to $9.78, a range where 3,660 addresses bought 1.12 million LINK.

Consequently, on-chain metrics provided by Santiment show that whales have begun accumulating the cryptoasset. For instance, addresses holding between 10,000 and 100,000 LINK have increased from 2,709 on September 9 to 2,739 on September 15. Similarly, the addresses containing between 1 million and 10 million LINK remained unchanged in the same period.

Chainlink holder distribution

LINK holder distribution

Looking at the other side of the picture

According to the above analysis, LINK is mainly in a bearish trend unless the bull flag pattern discussed comes into play. The only Hail Mary appears to be that some whales choose to increase their holdings amid the falling price. Eventually, the volume of created would sway the price upwards. Moreover, as LINK enters into consolidation, there is a likelihood the impending breakout is bullish, particularly if some of the resistance zones highlighted by IntoTheBlock IOMAP are flipped into support.


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended Content

Editors’ Picks

Bitcoin price rally not likely over as institutions deplete BTC OTC supply

Bitcoin price rally not likely over as institutions deplete BTC OTC supply

Bitcoin (BTC) price could cover more ground north as the BTC wells among over-the-counter (OTC) desks run dry. This is likely to see institutions look to public exchanges, with the resulting buying pressure likely to provide tailwinds for the pioneer cryptocurrency. 

More Bitcoin News

SEC approval of spot BTC ETFs was Bitcoin IPO, says expert

SEC approval of spot BTC ETFs was Bitcoin IPO, says expert

Bitcoin (BTC) price exploded to an intraday high of $64,000 on Wednesday before a quick retraction. Reports circulated that over-the-counter (OTC) BTC supplies depleted, which could compel institutions to switch to public exchanges as an alternative source of Bitcoin.

More SEC News

Coinbase exchange notes progress amid ongoing downtime

Coinbase exchange notes progress amid ongoing downtime

BTC soared to an intraday high of $64,000 before a quick correction. Amid excessive trading, Coinbase exchange crashed with users reporting zero balance. Coinbase acknowledged the incident, committing to resolve the matter.

More Coinbase News

Bitcoin shatters $63,000 as Jim Cramer posses a rhetoric on BTC value for mankind

Bitcoin shatters $63,000 as Jim Cramer posses a rhetoric on BTC value for mankind

Bitcoin (BTC) price has shattered past the $63,000 threshold, with the bulls not showing any signs of stopping. The upside potential remains alive, with BTC now eyeing $65,000.

More Bitcoin News

Bitcoin: BTC likely to correct to $50,000 soon

Bitcoin: BTC likely to correct to $50,000 soon

Bitcoin price has formed a potential top signal that forecasts a sell-off. The weekly chart also points to a bearish divergence, which adds credence to the bearish outlook. Investors can expect BTC to consolidate between the $52,062 to $45,160 levels.

Read full analysis

BTC

ETH

XRP