After setting a new all-time high at $8.92, ChainLink (LINK) is experiencing a heavy retracement.
One area for a potential bounce for LINK is the previous ATH at around $5.
An earlier ATH around $1.50 is where ChainLink found support during the Coronavirus crash of mid-March.
The ChainLink project has a bright future ahead and so does the LINK token.
As Bitcoin (BTC) continues on its interstellar mission above $10,000, ChainLink’s fortunes in the crypto markets are in the opposite direction. LINK is in the midst of a normal, yet heavy correction, from its recent all-time high value of $8.92 to its $7.13 value at the time of writing this. Furthermore, LINK seemed to dip harder as Bitcoin pumped with the digital asset falling below $7 to $6.50 – Binance rate – when Bitcoin broke $11k.
LINK is not as Correlated to Bitcoin as Other Altcoins
The lack of correlation between LINK and Bitcoin was the driving force for ChainLink as it hit its recent all-time high. At that time, Bitcoin was flirting with $9k levels for close to two months. This fact was highlighted by the team at Cane Island Alternative Advisors via the following statement and before LINK printed its recent all-time high.
Unlike most other cryptocurrencies and tokens, LINK was not materially influenced by Bitcoin’s price movements. The merit to this finding lies not only in an investment diversification benefit, but in that almost none of the popular naysay arguments against Bitcoin would have much weight or applicability to LINK.
LINK’s Hope Lie with its Previous ATH Around $5
To get a picture as to when ChainLink might turn bullish again, we visit the daily LINK/USDT chart courtesy of Tradingview.com.
From the chart, the following can be observed.
LINK’s price is still overextended as its value is very much above the 50-day, 100-day and 200-day moving averages.
Trade volume and the daily MACD are in the red further confirming the retracement.
The daily MFI is also pointing towards more losses for LINK.
On a macro level, the daily moving averages line up with strong support zones of $5.80, $5 and $4.20.
The support by the 100-day moving average also coincides with the previous all-time high of LINK at around $5.
LINK found similar support at a previous all-time high of $1.50 during the COVID19 crash of mid-March
ChainLink (LINK) is in the midst of a heavy correction. The digital asset has proven to not be affected as much by Bitcoin’s price movement. This lack of correlation with Bitcoin might find LINK dropping to as low as its previous all-time high value around $5.
Timothy Peterson, of Cane Island Alternative Advisors, and the investment manager who pointed out LINK’s potential to continually grow based on Metcalfe’s value, also sees one scenario where LINK drops to $5. He made this statement via the following tweet and also cautioned that ChainLink’s growth is an important variable in determining the future value of LINK.