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ChainLink: a price analysis of LINK
ChainLink: a price analysis of LINK
Trading

ChainLink: a price analysis of LINK

By R.L. Bryer - 31 Oct 2020

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At the time of writing the price of Chainlink (LINK) is $11.50 and it is down 2.2% in the last 24 hours. With Bitcoin pulling back today more than $700 at one point, ChainLink and most of the alts dropped. 

A lot of eyes have been fixed on the US stock market and whether or not bitcoin and other strong cryptocurrencies can decouple from the legacy market. 

Today was a day that showed stronger correlation than crypto advocates would prefer but lately crypto has been proving the potential to be an asymmetric hedge. 

ChainLink price nonetheless is up 325% in the last 12 months and was a leading indicator the cryptocurrency bull market was back in 2019. 365 days ago ChainLink was just $2.67 and outside of the Top 30 cryptocurrency projects by market capitalization. 

Over the span of just 1 calendar year, LINK succeeded in busting into the Top 30, then Top 20 and has now found a home in the Top 10 projects. 

The stats prior are against an inflationary fiat currency, the US dollar. However, when comparing LINK to BTC and the pair across the existence of the ChainLink project it begins to really illuminate how strong LINK has been.

Source: Barchart

If LINK price closes at $9.88 or above on the monthly, it will be the second highest monthly close in LINK’s history. The chart below shows the historical price for LINK on the monthly time scale. 

Source: Yahoo Finance

LINK was overbought when it hit an all-time high of $19.83 reached on August 16th, 2020 but has since cooled and could be poised for more positive price action.

ChainLink’s core of devoted project advocates known as the ‘LINK Marines’ also point to a lot of recent news as reason for excitement. ChainLink CEO Sergey Nazarov recently tweeted about the value added by additional connectivity of networks. 

With the recent failure of Harvest Finance, it’s likely that smart money will only partake in DeFi projects that have decentralized verifiability through a ChainLink product.

A perfect example of ChainLink securing value is with their Proof of Reserve. Proof of Reserve allows for on-chain cross-chain audits of cryptocurrencies.

A primary example, BitGo, is using ChainLink oracles to secure wrapped bitcoin valued currently over $1.5 billion dollars. That’s only wrapped bitcoin however, and with PayPal’s formal announcement of entering the cryptocurrency realm, there’s surely more to come.

Additionally, there are already rumours that PayPal would like to buy BitGo. The recent addition of Ben Chan to ChainLink Labs has sparked the idea of a ChainLink, PayPal, BitGo collaboration since Chan was the former CTO of BitGo.

Comparing the past 12 months, LINK is +334%, BTC is +43.4%, GOLD is +26.3%.

Of course in the short run price is extremely difficult to predict and in the short run bitcoin very much still controls the macro market. However, over time it is possible to see data suggesting, at least with past performance, that Chainlink’s price is potentially an early indicator of macro market sentiment.

*The author holds a number of different cryptocurrencies at different times and is holding ChainLink at the time writing of this article.* 

R.L. Bryer
R.L. Bryer

Since 2009, the onset of the bitcoin network, R.L. Bryer has been covering the space. He is the author of Blockchain: Project Renaissance Volume I and II. He's also been the guest of countless bitcoin and cryptocurrency related podcasts throughout the world. Every opportunity, he speaks on or writes about Austrian Economics and how bitcoin is the world's preeminent money.

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