A widely followed crypto analyst says token inflation could make it difficult for Chainlink (LINK) to hit new highs in the next bull run.
In a new video, the anonymous host of InvestAnswers tells his 447,000 YouTube subscribers that the leading oracle network can still recover despite being down over 85% from its peak price.
Chainlink hit an all-time high of $52 in May 2021. The analyst says Chainlink going back to this price level will be harder than it was in the last cycle due to the larger number of LINK tokens now in circulation.
“There’s 31% more tokens than there were the last time we hit the high. That means if you look at the price today versus back then, you need a lot more buying pressure to take it back up to that level to match the price because the market cap will be a lot higher. I hope people get that.”
The analyst also notes that the Chainlink versus Ethereum pair (LINK/ETH) is currently nearly 90% down from its high, and that demand for LINK will have to pick up significantly for the pair to recover.
“The historic average of the LINK/ETH ratio was 0.02 ETH. Now it is 0.0047 ETH, so it’s a long way off where it needs to be.
The question is will demand pick up for the token and if so, it could drive the price up a lot…
It’s very much alive, but it is also down 89% against Ethereum so if you had a choice of holding a bag of Ethereum or Chainlink and you chose Chainlink, versus Ethereum, you would lose 90% of your asset as opposed to holding Ethereum.”
Chainlink is currently trading for $7.64, up by 1.2% over the last 24 hours.
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