The host of popular crypto channel Coin Bureau says Chainlink (LINK) price action is still moving upwards despite a bumpy past few months.
In a new video, pseudonymous Coin Bureau host Guy tells his 1.81 million subscribers that LINK was a hot altcoin early in 2021 but has cooled off in the latter half of the year.
“Despite all of Chainlink’s announcements, partnerships, updates, and developments, LINK is only up 50% since the start of 2021.
This is much less than just about every other cryptocurrency, 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 worn off over the last half-year or so.”
Guy also explains how the team behind Chainlink has been selling LINK off, creating enormous sell pressure on the oracle altcoin.
“The Chainlink team has been selling millions of LINK to finance Chainlink’s current operations and future expansion.
Back then [before the team began selling LINK], LINK’s circulating supply was around 400 million.
Today, LINK’s circulating supply is slightly north of 467 million.
Now, assuming an average price of around $20 per LINK, this works out to over $1.3 billion of sell pressure,
Which is honestly insane.”
Guy then explains that this sell pressure is good for Chainlink’s long-term price action but damaging in the short term.
Another driver of LINK’s relative underperformance is its status as a “speculative investment,” as Guy explains in detail.
“LINK’s primary use case is to pay for decentralized data feeds, which are required for almost every decentralized application to function.
In theory, this creates lots of demand for LINK, which should push up its price.
But in practice, it had next to no effect because LINK isn’t legal tender.
As such, any LINK that’s used to pay for data feeds is subsequently sold by node operators, and this selling pressure offsets the buying pressure created by the DApps [decentralized applications] which initially purchased the LINK.
Right now, the only demand driver for LINK is a speculative investment, and it looks like a lot of retail investors have taken their money elsewhere.”
Despite the insane sell pressure and decline in retail investor funding, Guy still thinks LINK is posed to reach 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 uptrend continues, Chainlink could reach new all-time highs in the coming months, assuming the bull market sticks around.”
Chainlink is trading at $20.22 at time of writing, down 1.51% on the day.
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