Chainlink’s Token Inflation Could Hinder Price Surge in Next Bull Run, Analyst Says
A popular crypto analyst believes that Chainlink (LINK) may struggle to reach new highs in the next bull run due to token inflation. Despite being down more than 85% from its peak price, the leading oracle network still has potential for recovery, according to the anonymous host of InvestAnswers. However, he points out that it will be harder for Chainlink to return to its all-time high of $52 in May 2021 because there are now 31% more LINK tokens in circulation. The analyst emphasizes that a larger buying pressure will be needed to match the previous price levels and market cap.
Chainlink vs Ethereum Pair Faces Significant Decline
The analyst also highlights the significant decline in the Chainlink versus Ethereum pair (LINK/ETH), which is currently down almost 90% from its high. To see a recovery in this pair, there will need to be a substantial increase in demand for LINK. The historic average of the LINK/ETH ratio was 0.02 ETH, but it is currently at 0.0047 ETH. Therefore, demand for the token needs to pick up significantly for the price to surge. Holding Ethereum instead of Chainlink would have resulted in much smaller losses during this period.
Current Chainlink Price and Conclusion
Currently, Chainlink is trading at $7.64, showing a 1.2% increase over the last 24 hours. While the analyst acknowledges that Chainlink is still alive and has potential for recovery, he cautions that token inflation and the decline in the LINK/ETH pair could hinder its ability to reach new highs in the next bull run.
Hot Take: Token Inflation Poses Challenges for Chainlink’s Future
Despite its potential for recovery, Chainlink faces obstacles in reaching new price levels in the next bull run. Token inflation, with a 31% increase in circulating LINK tokens, makes it harder for the cryptocurrency to match its previous all-time high. Additionally, the decline of the Chainlink versus Ethereum pair by almost 90% indicates a need for increased demand for LINK. While Chainlink remains alive and has shown some positive movement recently, these challenges could impede its ability to surge in the future.
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