Will Chainlink gains come undone as crypto market collapses under rumors?
- Chainlink price climbed above $9.20 for the first time since August 13, a three month high despite volatility in crypto.
- The rise in LINK price is supported by a large amount of Chainlink address activity.
- Analysts retain a bullish outlook on Chainlink as the altcoin breaks past key resistance at $8.40.
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Chainlink price hit a three-month high despite the ongoing uncertainty and volatility in crypto. Rumors of Samuel Bankman-Fried’s FTX exchange’s insolvency have increased the selling pressure on cryptocurrencies in general. Yet Chainlink has defied the negative sentiment and decoupled from cryptocurrencies to break past the $8.60 level.
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Chainlink hits three-month high despite mass market volatility
Chainlink, a decentralized blockchain oracle network on Ethereum is used to facilitate the transfer of tamper-proof data to on-chain smart contracts. Chainlink price climbed above the $9.20 level for the first time since August 13. LINK hit a three-month high despite crypto market volatility.
The rise in the altcoin’s price has been supported by an increase in active address activity over the last five weeks.
Chainlink address activity
The current volatility in the crypto market and the bearish sentiment among holders comes from rumors that Samuel Bankman-Fried’s exchange FTX is experiencing a bank run. Crypto influencers and critics argue that FTX has been pushed to the brink of a debt crisis. The exchange has witnessed outflows of $1 billion over the last few days.
SBF’s comments on how DeFi needs regulation and his blueprint for regulators have sparked the ire of the broader crypto community. Once the draft of the Senate Agriculture Committee’s Digital Commodities Consumer Protection Act (DCCPA) bill was leaked online, SBF’s stance on the issue became clear. SBF pointed regulators towards DeFi entities and platforms, deflecting their interest in regulating centralized crypto exchanges.
What’s more, Alameda, a leading principal trading firm, owned by Bankman-Fried and headed by Caroline Ellison, witnessed a decrease of 47% in its on-chain balance in the last month. Most of the funds of SBF-owned Alameda were deposited to FTX exchange and Genesis, a major crypto lender.
Jack Niewold, founder of Crypto Pragmatist believes the FTX exchange is insolvent, with massive outflows and increased selling pressure on FTT, the native token. Binance and large wallet investors are offloading their FTT in favor of USDT, USD or BUSD as the crypto community bands together to safeguard DeFi from regulatory policies.
Sam Bankman-Fried was once admired as the king of crypto.
— Miles Deutscher (@milesdeutscher) November 7, 2022
Now Alameda and FTX are rumoured to be on the brink of insolvency.
: Here's how it all went wrong for SBF and FTX.
Changpeng Zhao, the CEO of Binance told his Twitter followers that the sale of $584 million worth of FTT is a risk management measure. CZ argued that Binance wants to avoid an implosion like that of Terra’s LUNC (previously LUNA) and UST.
Liquidating our FTT is just post-exit risk management, learning from LUNA. We gave support before, but we won't pretend to make love after divorce. We are not against anyone. But we won't support people who lobby against other industry players behind their backs. Onwards.
— CZ Binance (@cz_binance) November 6, 2022
FTT price nosedived 23% overnight and FTX exchange is drowning in multi-billion withdrawals over the past few days. This uncertainty has pushed crypto prices lower and Chainlink decoupled from cryptocurrencies to lead the pack with 23% gains in two weeks.
Analysts are bullish on Chainlink, predict continuation of uptrend
Sheldon Sniper, a crypto trader and technical analyst believes Chainlink price has bullish potential. The expert noted that Chainlink price broke an 18-month weekly trend and is ready to target the $12.60 and $16 levels.
LINKUSDT price chart
The $8.40 level is key resistance for Chainlink, and a break past this level would provide confirmation of a bullish breakout. If Chainlink price fails to sustain above the $8.40 level, it will invalidate the bullish thesis and the asset will continue its decline along the 18-month trendline.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
