The price of Chainlink is rising exponentially, so much so that some are asking themselves, is it a pump and dump?
Until May of last year, the price of the LINK token had always been below $1, but since then it has started to grow.
At the end of June 2019, it reached $4 for the first time, but afterwards it dropped back just under $2.
A new bull run was triggered in February 2020, when the price peaked again at over $4.5, only to fall back below $2 due to the collapse of the financial markets in mid-March.
However, it had already recovered to $3 just before mid-April, and by the end of May, it had risen to over $4.
From June 6th onwards, however, it grew exponentially, first to over $8.5 in mid-July, and then to over $14 on August 9th.
After a small retracement to $12.5, it started to grow again, and today it is even close to $18.
As a result, in just over a month it has gained 253%, more than tripling its value, and in the last two weeks alone it has increased its value by 156%.
In the last 24 hours alone, it has increased by 25%.
Pump and dump risk for Chainlink
This growth seems very fast, if not too fast, so much so that there are those who speculate that LINK could be the subject of a pump and dump scheme.
This type of scheme artificially pushes the price to rise a lot, in a short time, until the push is exhausted and the price collapses.
It is not clear whether the push that LINK is receiving these days is artificial, but it is clear that the growth is very fast and sustained. \
Although on the one hand there are no certainties about the hypothesis of a pump and dump, on the other, it is legitimate to have doubts about the fact that the growth is organic, or at least healthy.
How high can Chainlink go?
In fact, these rapid and exponential growths are often not sustainable in the long term, and tend to generate speculative bubbles that then burst and bring the price back to more sustainable levels.
It is difficult to say what this level might be, and even theoretically it is not even possible to exclude that the price might rise further.
However, if until the end of July the growth might have seemed organic, if not even healthy, what has been happening in the last two weeks may be a bit perplexing. There is a risk that a speculative bubble, ready to burst, has been generated.
It must be said, however, that LINK is a token that is actually being used within the Chainlink platform, but this does not seem sufficient to justify the parabolic increase in its price in the last two weeks, and in particular in the last two days.
It is enough to consider that, on CoinMarketCap, Chainlink has now surpassed a historical project such as Bitcoin Cash in terms of market capitalization, undermining it from the fifth position, held for several years by BCH (until a few months ago it was even fourth).
It is not uncommon that parabolic growths like these actually hide an ongoing speculative bubble ready to burst, regardless of whether or not there is a pump and dump scheme in place.