Link: 11/9 Status Update

A look at the trading status of the Chainlink token

While I’m currently writing these updates on a weekly basis, yesterday’s price increase clearly warrants one, so here we go.

The war is cancelled

The cancellation of SegWit2x came as a surprise to nearly everyone. There were signs that the project wasn’t where it should, especially regarding development, but no one thought that the signers of the New York Agreement would concede defeat without a fight, especially this close to the fork.

They did, though. And alts mooned, including Chainlink.

Price action

As expected, money flowed to alts that had formed a solid bottom and had good fundamentals. Chainlink was up even by 50% all the way to 3,900 sats ($0.2585) on very high volume, but it deflated as soon as it touched the EMA22 on the daily charts. Today it’s up again at 3,250 sats on decent volume. Good. An inability to follow through on yesterday’s rise would have been very worrying.

Many other alts mooned yesterday. While hardly any did as fast as Link, quite a few ended up making the most of the altcoin boom while Chainlink just ended up doing okay. Here’s why I think that happened:

Daytrading: Link was one of the first tokens to moon fast, so a lot of momentum-chasing daytrading money moved there. (Total volume was almost $5.5M, the highest in three weeks). They went in, probably looking at the hourly chart, and left as soon as volume faltered. A lot of daytraders must have made really nice money on the pump. Bagholders leaving the ship: Many people who bought in the $0.20–0.25 area have been suffering as Link went lower day after day for weeks. Their anguish must have only been increased by the crazy expectations many had about Link. If it’s such an amazing token, why is it taking such a beating? And then they see many other coins moon, all those missed opportunities. So, instead of cutting their loses and investing in something else, they waited for Link to go back to the point where they bought. And when it did yesterday, they sold never to look back. The same will happen if Link goes back to the $0.40 area or all the way up to the $0.52 high.

Wallets and exchanges

Part of the reason for my theory comes from the data I gathered about wallets and token distribution. We got an extra 1.1% wallets, sure, but growth used to be 1.5% on lower volume. Also, while the percentage of tokens owned by the top 100 wallets went up about .15%, the percentage owned by the top 250 and 500 went down about .10%. Some bought to hold. Others sold to feel free.

No big changes on the top 50 wallets, though. Some money flowed from what I assume are Binance cold wallets to the hot one. That’s it. Binance still has over 90% of the volume, with Etherdelta and Mercatox behind. Link is also traded on Coss and Idex, but volume there is next to nothing.

Bitcoin trouble

SegWit2x is over, but it will come back from the grave sooner or later, like the villain in a horror movie. Meanwhile, a different kind of uncertainty is taking hold among Bitcoin chart-readers.

Many expect the influx of new money to make Bitcoin moon all the way to 10,000 by the end of the year, but the price is forming a double top just like it did before the last two corrections. For some, the failed high yesterday was the second part of the top. They’ve already exited Bitcoin. Others like me think a new top is still possible in the 8,200 area. The last two times, the second top was 10.5% and 11.5% higher than the first, so 8,350 would be it. If it gets there on lower volume and with a lower high on the RSI indicator, I’m out until it corrects back to the 5,100 area. If yesterday’s high was the second part of the top, the correction will happen much sooner.

When Bitcoin dips, alts moon, but when Bitcoin corrects hard, money leaves the market and alts correct even harder. It will be a good time to stand aside in fiat and wait the situation to stabilize.

And Link?All I want to see in the near future is a test of yesterday’s 3,900 high and higher lows. With no announcements or new exchanges on the horizon, that’s all we can hope for realistically.