Chainlink Price Crash and Potential Recovery
Chainlink price has crashed this year, continuing a trend that started in December when it peaked at a multi-year high of $30.78.
Chainlink (LINK) dived to $17.4 on Saturday, down by 43% from its highest level in December. Its crash mirrors the happenings among altcoins as most of them have retreated in the past few months.
Reasons for Potential Price Recovery
Still, there are three key reasons why the LINK price may bounce back later this year.
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Holding Behavior of Investors:
Data indicates that many Chainlink holders are not selling their coins, as balances on exchanges have fallen to 138.8 million LINK coins, the lowest since September last year, from 160 million in December. Falling exchange balances suggest optimism among investors who are holding their assets in self-custody wallets. -
Expectations for a Spot LINK ETF:
Confidence among holders is likely due to the anticipation that the Securities and Exchange Commission will approve a spot LINK ETF later this year, which would lead to increased inflows and higher prices. -
Chainlink’s Industry Position:
Chainlink is the largest oracle network with a total value secured (TVS) of $35 billion, outperforming competitors like Chronicle, Pyth, and RedStone. It’s also a significant player in the Real World Asset tokenization industry through its cross-chain interoperability protocol (CCIP), which aids in connecting and transmitting assets across different blockchains.
Chainlink Price Analysis
Additionally, Chainlink price may rebound due to strong technical indicators. The weekly chart shows that LINK remains slightly above the 100-week Exponential Moving Averages, despite a 43% crash since November’s peak.
LINK has formed a megaphone chart pattern, characterized by diverging trendlines, which often precedes a strong bullish breakout. The initial rebound target is the November high of $30, followed by a 61.8% retracement point at $35. A drop below the lower side of the megaphone would invalidate this bullish outlook.
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