The price of Chainlink (LINK) reaches a new high after bullish comments on asset tokenization
The price of Chainlink (LINK) surged by 16% to reach a peak of $16 on January 17, following positive remarks about asset tokenization made by Blackrock CEO Larry Fink. During a Bloomberg interview, Fink stated that asset tokenization is the “next step” for institutional involvement in the crypto sector. This news has contributed to the recent uptrend in LINK’s price.
Chainlink’s role in the asset tokenization wave
Asset tokenization is a major focus in the crypto market, with many traditional financial institutions venturing into this sector. Chainlink, as a blockchain oracle, plays a crucial role by providing offline price feeds for asset tokenization projects. It bridges the gap between decentralized finance (defi) and traditional finance (tradfi), supporting the real-world asset sector.
Increase in LINK price not matched by network usage growth
Despite the significant price surge, data from Santiment suggests that the recent rally may be driven primarily by speculative traders rather than genuine network demand. While LINK’s price increased by 16% between January 12 and January 17, the number of daily active addresses on the Chainlink network only rose by 4%. This indicates that the current price rally may not be sustainable without substantial growth in Chainlink’s fundamental metrics.
Chainlink whales selling off tokens
The largest investors in Chainlink, known as whales, have been taking advantage of the price rally to sell their tokens and book profits. Between January 12 and January 17, these whales sold 2.3 million LINK tokens, reducing their cumulative balance to 748.5 million LINK. This trend suggests a short-term bearish outlook and may put downward pressure on LINK’s price if it continues.
Short-term forecast for Chainlink price
Based on the analyzed on-chain data, it is unlikely that Chainlink’s price will reach $20 in the short term. Without significant growth in network usage and whale accumulation, the current rally is driven mainly by speculative trading. However, if the momentum turns bearish, initial support can be found around the $14.5 area. Short-covering maneuvers by existing LINK holders may prevent a further decline in price. On the other hand, flipping the $20 territory could negate the bearish outlook, but there is a significant sell-wall at that level.
Hot Take: Chainlink’s price surge driven by speculation rather than genuine network demand
The recent surge in Chainlink’s price can largely be attributed to speculative swing traders capitalizing on positive comments about asset tokenization made by Blackrock CEO Larry Fink. However, data shows that there has not been a substantial increase in network usage or whale accumulation during this period. This indicates that the current rally may not be sustainable without significant growth in fundamental metrics. As a result, caution should be exercised when considering the short-term prospects of Chainlink’s price reaching $20.
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