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


  • 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.

Cryptos feed

Latest Crypto News


Latest Crypto News & Analysis

Editors’ Picks

Bitcoin difficulty ribbon flashes buy signal

BTC is trading around $10,715 and sitting on top of the $10,700 support level. The buyers need to do everything that they possibly can to defend this level. If the sellers break below this level, the price can plummet to $9,700 before it meets another healthy support.

More Bitcoin News

Ethereum Market Update: ETH continues to consolidate position below $360

The ongoing boom in decentralized finance (DeFi) space has been very beneficial for Ethereum. The demand for ETH has continuously surged in recent times. However, it is DeFi that’s dominating the headlines in ...

More Ethereum News

Chainlink Price Analysis: LINK goes through consolidation, preps for a breakout

LINK broke above the downward trending line this Thursday and is currently trending horizontally between the $10 support line and the SMA 20 curve. This indicates that LINK is presently in a ...

More ChainLink news

Theta Price Prediction: THETA poised for a healthy pullback before resuming uptrend

THETA has been trading inside a robust uptrend for the past four months and hit a new all-time high at $0.76 on September 28. Its market capitalization has grown from $46 million on March 16, to a current high of $640 million.

More Bitcoin News

BEST CRYPTO BROKERS/EXCHANGES

Bitcoin Weekly Forecast: Keep calm and HODL on until the USA elects the president

Bitcoin (BTC) partially regained the losses incurred at the beginning of the week; however, the upside momentum is still too weak to take the price out of the bearish territory and ensure a sustainable recovery. 

Read the weekly forecast

BTC

ETH

XRP