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LINK – a Potential Bubble or a Long-Term Investment?

Abnormal price growth in the crypto market is not a new concept. However, regardless of whether the price movement is supported by fundamental factors or the laws of supply and demand in the market, investors are always divided into categories “bubble” and “to the moon”.

The situation around the Chainlink coin is no exception. The coin, which over the past year has been consistently in high positions in the daily trading volumes on the stock exchange and significantly volatile, is now truly surprising. Close use of a decentralized network of oracles is widely used in DeFi to create smart contracts and functionality of applications.

Is it a good time to invest in this coin now?

‘Cryptowhale’ crypto investor and analyst said that Chainlink is a bubble that is going to burst.

In point of fact, starting from 2017 even on the weekly coin chart, we can see the growth acceleration. However, if we analyze the growth waves from July 2018 to January 2019 and from April 2019 to July 2019, we can assume that this coin is corrected in the range 50-60%.

Throughout the year, buyers fought a grueling battle for the yellow range. Accumulating enough liquidity, especially given the fatal sale on 9 March, buyers started a new phase of growth. If we look at the pair against the dollar – it’s about $5 per LINK. So, we think that clearly after a sharp LINK price growth, the fall is expected. Although it will be a correction, not a bursting bubble.

What makes investors calm?

Of course, the largest holders have a good chance to crash the market by urgently selling their coins. According to cryptorank.io statistics, 60% of Chainlink is held by two investors. But, the main question is in which price zones other large buyers ready to pick up the coin. Factors which should appease LINK investors:

  1. Active projects development in the DeFi space makes Chainlink valuable in the crypto world.
  2. Chainlink’s trading volumes over the past 24 hours are almost $1.5 billion. It is the 8th place of the overall ranking. If we talk about DeFi coins, then this coin continues to lead and exceeds almost 7.5 times the nearest opponent.

We will follow how buyers react to probable test of the range $9-10. Certainly, given the current coin price, it is a painful correction. However, if we take into account the average coin volatility 12-15% during the day at average volumes and up to 30% at increased trading volumes – such a correction is quite acceptable.

Nevertheless, what should we do with the information that LINK during the March sale fell to 0, having the same high volumes and prospects? The question is rhetorical and requires more time for research.

Charts courtesy of TradingView

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