The host of popular crypto channel Coin Bureau said that Chainlink’s (LINK) price action continues to rise despite the past bumpy months.
In a new video, Guy, pseudonymous host of Coin Bureau recount its 1.81 million subscribers that LINK was a hot altcoin at the start of 2021 but cooled off in the second half of the year.
“Despite all of Chainlink’s announcements, partnerships, updates and developments, LINK has only grown by 50% since early 2021.
That’s a lot less than almost all other cryptocurrencies, and even some stocks.
So, what gives? ”
For starters, LINK is a DeFi [decentralized finance] token.
DeFi was hot in 2020 and early 2021, but the hype has faded over the past six months or so. “
Guy also explains how the team behind Chainlink sold LINK, creating huge selling pressure on the oracle altcoin.
“The Chainlink team has sold millions of LINKs to fund Chainlink’s current operations and future expansion.
At the time [before the team began selling LINK], LINK’s outstanding supply was approximately 400 million.
Today, LINK’s circulating supply is just north of 467 million.
Now, assuming an average price of around $ 20 per LINK, that adds up to over $ 1.3 billion in selling pressure,
Which is honestly crazy.
Guy goes on to explain that this selling pressure is good for Chainlink’s long term price action but detrimental in the short term.
Another factor in LINK’s relative underperformance is its status as a “speculative investment”, as Guy explains in detail.
“The main use case of LINK is to pay for decentralized data streams, which are necessary for the operation of almost any decentralized application.
In theory, this creates a high demand for LINK, which should push its price up.
But in practice, this had almost no effect because LINK is not legal tender.
As such, any LINK used to pay for the data feeds is then sold by the node operators, and this selling pressure offsets the buying pressure created by the DApps. [decentralized applications] who originally bought the LINK.
Right now, the only demand driver for LINK is speculative investing, and it looks like many retail investors have taken their money elsewhere. “
Despite insane selling pressure and declining funding from retail investors, Guy still believes LINK is on the cusp of reaching new all-time highs soon.
“LINK is still in a clear uptrend unlike many other cryptocurrencies that never fully recovered from the massive crash in May.
If this bullish trend continues, Chainlink could hit new all-time highs in the coming months, assuming the bull market persists. “
Chainlink is trading at $ 20.22 at the time of writing, down 1.51% on the day.
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