ChainLink: an analysis of the price of LINK

At the time of writing this article, the price of Chainlink (LINK) is $11.50 and has fallen by 2.2% in the last 24 hours. With Bitcoin now registering a drop of over $700, ChainLink and most altcoins are falling.

Many eyes are fixed on the US stock market and whether or not Bitcoin and other strong cryptocurrency can decouple from the traditional market.

Today was a day that showed a stronger correlation than crypto supporters would prefer, but lately cryptocurrencies have shown the potential to be an asymmetric hedge.

The price of ChainLink has however increased by 325% in the last 12 months and was one of the main indicators of the bullish crypto market in 2019. 365 days ago ChainLink was only $2.67 and outside the Top 30 of the market capitalisation projects.

Within just one year, LINK managed to enter the Top 30, then the Top 20 and now found a home in the Top 10 of the projects.

The above statistics relate to an inflationary currency, the US dollar. However, when you compare LINK with BTC during the existence of the ChainLink project, you begin to understand how strong LINK has proved to be.

If the price of LINK closes above $9.88 on the monthly, it will be the second highest closing in the history of LINK. The chart below shows the historical LINK price on the monthly time scale.

LINK was overbought when it reached an all-time high of $19.83 on August 16, 2020, but has since calmed down and may be ready for a more positive price action.

Even the most ardent supporters of the ChainLink project, known as the ‚LINK Marines‘, rely on much recent news as a reason for enthusiasm. ChainLink CEO Sergey Nazarov recently tweeted about the value created by additional network connectivity.

With the recent bankruptcy of Harvest Finance, it is likely that smart money will only participate in DeFi projects that have decentralised verifiability through ChainLink.

A perfect example of how ChainLink ensures the security of value is with the Proof of Reserve. The Proof of Reserve allows on-chain and cross-chain verification of cryptocurrency.

A prime example is BitGo, which uses ChainLink oracles to protect bitcoin wrappers (WBTC), currently worth over $1.5 billion. Moreover, with PayPal’s formal announcement to enter the cryptocurrency space, there is certainly much more to come.

What’s more, there are already rumors that PayPal would like to buy BitGo. The recent addition of Ben Chan to ChainLink Labs gave birth to the idea of a collaboration between ChainLink, PayPal and BitGo, since Chan was the former CTO of BitGo.

Comparing the last 12 months, LINK scores +334%, BTC +43.4%, GOLD +26.3%.

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