Chainlink may be going through an accumulation phase
Chainlink, at the time of writing, was trading at $ 27.56, below the $ 35 level seen at the end of February 2021. However, it remains an exciting time for LINK. In fact, it may even be an accumulation phase for Chainlink, especially since its correlation with Bitcoin was observed at more than 71%, based on Cryptowatch data.
Based on historical data, during Bitcoin’s extended bullish races, major altcoins like Ethereum and Binance Coin recorded gains in the number of active addresses on their networks. The same happened with Chainlink, with recent data from Santiment highlighting the increase in active LINK addresses.
While it is anticipated that Chainlink’s price will increase exponentially in the long run, especially as altcoin enters the NFT market with dynamic NFTs, an immediate price increase can only be expected from its correlation with Bitcoin.
The recent nearly 10% drop in the price of Bitcoin, from its $ 61,683 ATH, has led to a corresponding drop in the price of Chainlink. However, shortly thereafter, both assets gained on the charts, with LINK appreciating also thanks to its correlation with BTC and the slow but consistent recovery of the latter on the price charts.
In addition, alongside Litecoin and Polkadot, Chainlink has led the altcoin rally several times in the current market cycle. Consider this – Chainlink’s oracle network today supports an increasing number of DeFi applications, with the same key to the asset’s price gain of 14.9% since February 23. While yes, the price has fallen by more than 11% on a weekly basis to date, this can be a buying opportunity for retail traders under $ 30.
What sets Chainlink apart from other altcoins in the current cycle are its accelerated integrations, usually 10 per week, and its credentials cited by the World Bank in a recent research article. In light of the expectations associated with LINK’s long-term growth, the current price range may be just the accumulation level for interested investors.
Furthermore, historically, Chainlink’s volatility percentiles have proved to be an interesting indicator of the accumulation phases, with percentiles above 70% indicating the distribution phases where the price has risen rapidly. This is usually followed by a correction and a restart of the cycle. The current volatility percentile represents the accumulation phase for Chainlink, before a price advance.
Based on the attached TradingView chart, the crypto is currently in the accumulation phase. Therefore, in the short term, the price should reach the level at the end of February 2021, before a correction based on the historical volatility percentile occurs.