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Chainlink (LINK) Still Looks Good Despite Loss of Upward Momentum

Other 2020/10/14 12:00 by Nick Chong

Chainlink (LINK) has been one of the fastest-rallying coins over recent weeks.

The leading Ethereum-based cryptocurrency underwent a strong bounce from its $7.75 lows to a recent high just shy of $12. This meant that from the lows, Chainlink gained over 45%, making it one of the top-performing coins from the September lows.

LINK has dropped slightly from its highs. The coin now trades at $11 as of this article’s writing, just over 5% below the recent local highs.

Analysts think that Chainlink still has upside from here despite the loss of upward momentum. Key trends showing this include strong futures trends and a negative funding rate, which suggests that shorts could be squeezed from here.

Related Reading: Here’s Why Ethereum’s DeFi Market May Be Near A Bottom

Chainlink Set to Move Higher, Analysts Say

Chainlink is set to move higher in the days ahead as futures and technical trends suggest the trend remains positive.

One crypto-asset trader recently shared the chart below, which shows that even after the slight correction, LINK sits above three technical levels: an exponential moving average, a horizontal at $10.75, and the point of control as per the volume profile.

He added that with LINK futures open interest increasing as the funding rate of the market decreases, the cryptocurrency is set to continue its ascent.

Image

Chart of LINK's price action since the start of September with analysis by crypto trader Byzantine General (@Byzgeneral on Twitter). Source: LINKUSD from TradingView.com
Related Reading: Tyler Winklevoss: A “Tsunami” of Capital Is Coming For Bitcoin

How Does LINK Have Such a High Market Cap?

While Chainlink has room to rally in the near term, not everyone is convinced of the coin.

Kyle Samani, co-founder and managing partner of Multicoin Capital, recently sat down with Nic Carter of Coin Metrics. Samani’s fund, Multicoin Capital, has investments in a number of altcoins, including smart-contract platforms.

When discussing his views on cryptocurrencies with high market capitalizations, he questioned why LINK has such a high market cap. He specifically used the word “perplexing” to describe what he thinks about Chainlink having a “$10 billion market cap.”

Others have echoed this skepticism.

Of note, Chainlink has been seeing increasing fundamental use by a series of contracts and applications on Ethereum. For one, Chainlink’s new Proof of Reserves technology was just adopted by BitGo for Wrapped Bitcoin, a leading DeFi product.

LINK was also recently listed on OKCoin, alongside two other coins, YF Link and DFI.money.

Related Reading: 3 Bitcoin On-Chain Trends Show a Macro Bull Market Is Brewing
Featured Image from Shutterstock
Price tags: linkusd, linkbtc
Charts from TradingView.com
Chainlink (LINK) Still Looks Good Despite Loss of Upward Momentum

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