3 main reasons for Chainlink heading towards this
Chainlink was trading above the $20 level based on price data from coinmarketcap.com. Trade volume dropped by 5% in the past 24 hours. This indicated a drop in liquidity and volatility. However, this has not affected the price negatively. Chainlink holders have watched the price drop from $52.20 to $25.27.
This is a drop of over 50% from last month’s ATH, however this is still not bearish for LINK since the previous times that LINK trader returns dropped this low in a 30-day span, there were major bounces that followed.
As seen in the above price chart, bounces in LINK’s price are linked to LINK’s accumulation by traders. HODLer composition is key to LINK’s price. At the current price level over 45% HODLers are profitable. The concentration by large HODLers is at 78% and in the past week, there have been transactions of over $2.7 Billion.
This volume of transactions indicated that there is a bullish future for LINK’s price. The price is likely to dip if LINK’s recovery is interrupted by increasing LINK balance on Exchanges. Since an increase in balance would indicate an increase in the liquidity and available LINK across markets in spot exchanges, a price drop will become increasingly likely. HODLer and on-chain metrics currently support the bullish narrative, resisting against selling pressure.
The latest collaboration and updates on the LINK network have added to the increasing investment inflow and demand. The upcoming events in LINK, in August are likely to drive the price higher. Until then, the price is expected to remain rangebound or rally further. A dip in price is unlikely, unless there is an increase in selling pressure. More often than not, LINK is positively correlated with Bitcoin during its rally; however, it continues rallying fairly after Bitcoin’s price drop as well. This may continue in the future as well, with LINK trading at the $20 level.
Among other DeFi projects, LINK is the one with the relatively high market capitalization and correlation with Bitcoin. Increase in LINK’s TVL and user, on-chain activity is bullish for other DeFi projects as well. Heading towards a bounce back, metrics indicated a bullish rally for LINK this week.