Chainlink Bounces Up by 7% before Hitting a Support at $6

As August 2022 approaches its end, the crypto prices seem to be starting a slight recovery that follows after yet another major crash. Only days ago, Bitcoin once again fell under $20,000 for the 4th time this summer, and as usual, Bitcoin leads the market and commands the rest of the crypto industry, which follows due to its massive dominance over the crypto industry.

The same is true for Chainlink (LINK), which is the project that we are interested in checking out today. According to its 7-day chart, Chainlink was balancing at around $7 during the better part of the last week, and it was even trying to go up. It reached $7.40 on August 25th, only to start sinking as the weekend started, which led it to drop to $6.23 on Monday morning, which was the lowest point it has seen in over a month.

But, the coin has definitely been much lower than that earlier this year, and it managed to recover. As of today, August 30th, its price is apparently recovering again, and as soon as it moved — the investors moved with it.

What is Chainlink?

Chainlink is easily one of the most revolutionizing projects that have emerged after Ethereum. Launched in 2017, the project acts as a blockchain abstraction layer that allows universally connected smart contracts.

To put it simply, smart contracts are based on blockchain technology, and blockchain is isolated from the real world, as well as the rest of the internet. This means that, if smart contracts needed outside information in order to self-execute, they would not be able to get it. That significantly limited their usefulness, and a solution needed to be found, which led to the creation of Chainlink.

Chainlink is a project that runs a decentralized oracle network, which can gather information from the outside world using multiple data sources, verify their accuracy and legitimacy, and transfer that data on-chain straight into the smart contracts that require it in order to function. It interacts with external data feeds, events, payment methods, and more, all in a completely secure way.

Chainlink’s network is driven by a massive open-source community that includes node operators, data providers, smart contract developers, security auditors, researchers, and others whose contributions to the network have allowed it to grow into a huge and irreplaceable data-collecting machine that it is today. It is one of the first networks that allowed the integration of off-chain data into smart contracts, thus making smart contracts useful for agreements that concern matters outside of the blockchain, as well.

As such, Chainlink became a major player in the data processing field and one of the most important projects for pushing smart contract adoption these days. It has not only attracted the attention of numerous trusted data providers but also companies that stand to improve their businesses by integrating blockchain into their businesses. As a result, it has become one of the biggest and most valuable projects in the crypto industry, and even though it inspired the creation of numerous other oracle projects, Chainlink is still the largest and leading project of this kind.

Chainlink historical price performance

As mentioned, Chainlink went live in 2017, with its earliest price information dating back to September 23rd. At the time, the project’s price sat at $0.17, and apart from a few short-term surges, the price has advanced very little over the next year and a half, only climbing up to $0.50 by April 21st, 2019.

This was around the time when the previous bear market — the crypto winter that followed the surge of 2017 that led Bitcoin to its $20k ATH —  started to let go, and the crypto recovery was finally ready to start. At the time, LINK's price started to increase and it finally went past $1 on May 19th, 2019. Of course, the surge did not end there, and LINK went all the way up to $3.7 before seeing a recovery to $2, which was followed by another surge to $4.7. The coin then saw a price crash in March 2020, following the rise of the COVID-19 pandemic. The crash came as part of the correlation with the stock market, but while the stocks kept sinking deeper and deeper, the crypto market broke off and started skyrocketing.

This led to a series of surges that took Chainlink up to $19 by August 15th, 2020, and then, in early 2021, the coin skyrocketed all the way up to the brand-new all-time high that still acts as its biggest record to date — $52.2, which it reached on May 9th.

Only two days later, the crypto market saw a crash after Elon Musk announced that Tesla would stop accepting Bitcoin payments for its vehicles due to Bitcoin mining’s massive energy consumption that makes the coin extremely environmentally unfriendly. With Bitcoin crashing, the rest of the market followed, and os Chainlink also spiraled all the way down to $13.7.

The situation turned again on July 20th, when the market started a broad recovery that took LINK back up to $35. Unfortunately, this resistance held it from progressing further, and it even caused it to crash in late September 2021. The coin attempted another surge which took it to the same resistance, and once again, LINK was unable to proceed. Around this time, November 11th came, and the bulls were suddenly replaced by the bear market which started a price crash that is still experienced today. And so LINK finished the year by crashing back down, which took it to $19.97 in the final days of December 2021.

LINK’s price performance in 2022

In early 2022, Chainlink’s price actually surged, going up to $28.47 on January 9th. This unexpected surge in the early days of the year did not last, however, but LINK did last more than the rest of the altcoin market. Most other cryptos started crashing back down four days earlier, on January 5th. LINK’s momentum, however, remained strong, and the coin grew until January 9th.

But, a strong surge is followed by a strong crash, and LINK price sank down to $15 before the end of the month. Since then, there were several surges whenever the bear market took a bit of a break, and that kind of behavior has continued to this day. Every time when the market attempted to stabilize due to the bears’ taking a break, LINK would try to shoot back up, only for it to crash back down once the bearish wave returned. In fact, its eagerness to grow also led to a much more severe crash that would almost always break the previous support and cause the coin to sink deeper and deeper.

Eventually, LINK found its bottom at $5.5, although it only reached these depths once, and between May 2022 and late August 2022, the coin has used $6 as its strongest support level. There were several attempts to grow, with the first big one taking place in early June. Around this time, LINK has surged from $6.9 to $9.25, only to crash back down to $6.

The next big increase came only a few weeks ago, in early August, when the coin once again started climbing up to $9.3, which was once again followed by a price crash, this time to $6.25. This latest price crash actually only finished yesterday morning.

In the early hours of the morning of Monday, August 29th, LINK price started to recover and grow. It went up by over 7% in only 24 hours, reaching its highest point at $6.7, which is where it sits right now, at the time of writing.

Judging by its past performances, LINK price is likely going to continue its surge for as long as can before the bearish market returns with another wave of price crashes. In fact, we expect this sort of behavior to continue until this current crypto winter is over, and LINK can finally recover to its real price in days, weeks, or months to follow.

One thing that is certain, however, is that the coin is heavily undervalued now, and that means that it will skyrocket significantly when given the opportunity, and especially when the bearish part of the crypto cycle ends.

The market sentiment

One more thing that is necessary to consider when looking into the price and its potential is what the market sentiment surrounding the coin is like. According to recent reports, Chainlink’s coin, LINK, has been showing consistent potential at $6.3, with $6.2 acting as its largest support in this area, while $9.6 has been the largest local resistance. In other words, even if the price surge continues in days to come, LINK will have to gather up quite a momentum to breach the resistance at $9.6.

Other reports have noted that bullish pressure surrounding LINK is rising and that there is potential for the coin to start moving closer to $10. However, multiple indicators suggest that a correction is on its way.

For the time being, there is a lot of uncertainty, but later this year, LINK will find itself in a good position to skyrocket as it is preparing to introduce staking in the second half of 2022. Not only that, but the network is also expected to launch a node delegation system, and these updates could help make LINK more secure and decentralized, maybe even spark a renewed interest in the project, which would go a long way when it comes to building its momentum.

It would certainly bring enough interest for the project to shoot up when the bearish market lets go, which could happen at any point in the next six months if this bear market ends up behaving similarly to the one from 2018/2019.

Chainlink also recently partnered with Shiba Inu’s (SHIB) competitor, Floki Inu. The idea is for Floki Inu to use Chainlink to improve its protocol, while Chainlink will attract new attention to its own project by partnering with a project whose popularity is on the rise.

What will happen next?

All in all, there is not a lot going on that involves Chainlink at the moment, but anything that is happening is mostly positive, which is just what LINK needs in order to create a base for the surge to come.

With the crypto market still deep in the bearish territory and as volatile and unpredictable as ever, it is difficult to say anything with any certainty. What can be said, however, is that Chainlink seems like one of the safest projects to invest in, as it has used every opportunity that the bear market gave it to grow and shoot up, even without major events that would spark such behavior.

The project is simply deeply undervalued and deeply valuable, both to the projects it works with and to investors.

To learn more about Solana, visit our Investing in Chainlink guide.