August 15, 2020

Market News

Focus on LINK course – what drives cryptocurrency?

2020 is a very turbulent year for most investors. While we were able to see new highs in a large part of the asset classes at the beginning of the year, the Corona crisis caused the market to cool down quickly. However, the current market environment also shows that some assets do better than the broad market. One coin that can convince in 2020 is Chainlink ( LINK ). In the following, we take a closer look at the relevant trends that influence the LINK course and dare a chainlink forecast for further development.

LINK rate has increased over 480% since the beginning of the year

Anyone who has invested in Link since January 1, 2020 has achieved a return of 480%. In a direct comparison, the tech index Nasdaq Composite achieved a return of around 14.5 percent. Although we are currently in the midst of a global pandemic, the return on the Nasdaq Composite should also be convincing, but in direct comparison the LINK price has really exploded.

The token also corrected with the outbreak of the corona pandemic and lost the performance achieved so far for the year as a whole. This means that investors who invested at the beginning of the year experienced almost no loss. Since the end of June, the LINK course has been in a clear upward movement. In the following we want to look at possible reasons that favor this trend.

Is the LINK course news-driven?

If we take a closer look at the most important news of the past months, there have been many reports about Bitcoin Halving, the upswing in decentralized finance and new business models. But in the midst of these numerous reports, Chainlink has also appeared several times. Chainlink secured strategic partnerships again. The functionality as Oracle for integrating data in other blockchains is particularly important.

Overall, Chainlink's fundamentals have improved. This development has also been noticed by investors, so that further growth speculation is likely to be included in the LINK price. Basically, it turns out that markets never act rationally. Rather, investors ensure that hopes and speculations spur prices.

On the other hand, we can also assume that some investors have FOMO. Accordingly, historically, LINK's rating is very high. The following fundamental data clearly speak for an investment in Chainlink:

  • Positive development of active wallet addresses
  • Focus on binance
  • New collaborations

1,500% increase in active addresses in the first half of the year

The first positive development that Chainlink can register concerns the active addresses. While there were still 970 active addresses in January 2020, this value rose to 14,255 by mid-July 2020. The data from flipsidecrypto.com also make it clear that the community as a whole is very active.

Nevertheless, it can also be seen that profit-taking has taken place in the past few days – the payouts were therefore larger than the deposits in LINK tokens. LINK also shows a positive development in daily transactions. So the average of the last 30 days is 6,100 transactions.

LINK Asset Distribution
LINK Asset Flow from the last 30 days @ FlipsideCrypto.com

The so-called Foundation Crypto Asset Score (FCAS) by FlipSideCrypto is also particularly positive. This is 913 out of a possible 1000 points and speaks for a strong fundamental base at Chainlink.

Another look at the wallets also shows that the number of wallets without LINK assets has doubled. With a growth of 1,500% in the area of active wallets, this development can be neglected.

LINK trading on more crypto exchanges

Glassnode data also shows that fewer and fewer LINK are on the wallets of the crypto exchanges. Nevertheless, much of the trading takes place at Binance. Around 3.5 million LINKs have been with Binance in the last 30 days alone. In second place is Coinbase with around 1.5 million LINK tokens.

Correlation link price and asset allocation
Coinbase continues to lead LINK trading @ Glassnode.com

On the other hand, if we look at the data from Glassnode, we see that the number of tokens on Exchange addresses is declining. There was also a clear dominance in favor of Binance at the beginning of the year. While this dominance remains intact, the total number of tokens held on Binance has dropped from more than 80 million to around 62.5 million. Overall, more and more investors are opting for Hodln on a private wallet. This trend correlates strongly with the increase in the LINK price.

Partnerships and cooperation have an impact on the LINK course

Chainlink is particularly relevant due to its oracles. These are the Ethereum network connected and therefore directly to import data in the block chain at Ethereum. This data can then be used for smart contracts. This is also one of the reasons why more and more dApp developers trust Chainlink.

This trust also results in strategically meaningful partnerships. Chainlink has probably the best known cooperations with Google Cloud, Tezos, Hedera Hashgraph, Nexo, Oracle and Kaden. This strong basis should also be one of the reasons why the Chainlink course has now reached new highs. And with RevPop, the next promising social media project is already in the starting blocks, which implements chainlink integration.

Conclusion: Chainlink course could have further potential

The course developments at Chainlink don't just work on pure hype. Of course, the market has already priced in further growth potential here. Nonetheless, it appears that it is not just news-driven growth.

Growth in the DeFi area in particular could increase the relevance of Chainlink in the medium to long term and underpin the current assessment with strong fundamental data. We already made it clear in our Chainlink forecast that LINK is a promising token – we have seen this development in recent weeks.