/Chainlink Corrects 11% From Its All-Time High; Dumping Ahead?

Chainlink Corrects 11% From Its All-Time High; Dumping Ahead?

  • Chainlink’s euphoric in the third quarter took its price to an all-time high of $8.53 on Monday.
  • Nevertheless, the tenth-largest cryptocurrency corrected lower by up to 19 percent from its record level.
  • Now a string of technical and fundamental catalysts hints that further bearish correction is underway.

Chainlink went to its own moon this week.

The tenth-largest cryptocurrency project (Ticker: LINK) established an all-time high at $8.53 on Monday. The gains appeared out of a parabolic uptrend that kicked off on June 6, 2020. Since then, the LINK/USD exchange rate has climbed by almost 80 percent.

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Chainlink's LINK topped at $8.53 as on July 13. Source: TradingView.com

Chainlink Fundamentals

A large part of Chainlink’s gains came out of a renewed interest in altcoins. As bitcoin traded in a sideways range in the last two weeks, traders started migrating part of their top coin positions into its top rivals. As a result, almost all the top-10 coins surged higher against Bitcoin.

Other reasons that allegedly boosted buying demand in the Chainlink market are its high-profile partnerships and a mere fear-of-missing-out sentiment among traders. Small upside gains, coupled with a rise in volume, led individuals to anticipate a breakout. That received further assistance from growing social media trends.

Santiment, a portal that tracks trends across the cryptocurrency sector, stated that Chainlink’s LINK token grabbed the top spot on their so-called Emerging Trends list. It stated that FOMO and FUD both played a crucial role in sending LINK to its all-time high.

“When a pumping asset like LINK went #1 on Santiment‘s Emerging Trends, it meant the mainstream became aware,” the portal tweeted Monday.

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LINK FOMO may come to an end. Source: Santiment

But Santiment also warned about the drying-out phase of a cryptocurrency pump. The portal said coins that top their Emerging Trends list typically reaches a state of bullish exhaustion.

“Based on our study, once the increased crowd attention subsides (which usually happens in a matter of hours/days), a short-term price correction – or consolidation – is often a likely outcome,” Dino Ibisbegovic, head of content at Santiment, wrote in a blog post.

Further Correction Expected

What Santiment feared has become reflective in the data provided by Glassnode. The blockchain analysis firm revealed that traders had transferred about $16 million worth of LINK tokens to different exchanges as of Monday, adding that it is the most massive LINK transfer “they have seen so far.”

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Over 5,000 LINK tokens made way into the Binance wallets on Monday. Source: Glassnode

The spike points to traders’ inclination to trade the Chainlink token off for other assets – or merely sell it at its local top to secure short-term profits.

Technically, the token stands into an overbought territory that, too, hints a deeper bearish correction ahead.

Photo by Fabian Quintero on Unsplash

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