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Chainlink: Traders under zero loss, but why?

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From the world of altcoins, Chainlink or LINK tokens seems completely unstoppable at the moment. In the past few days, Chainlink has risen by 45 percent in the charts, rising from $9.80 to $14.48 on the 9th of August.

As the token consolidates at its all-time high range, we looked into a few developments over the past few weeks to estimate LINK’s current ceiling, if there is one at the moment.

LINK/USD on Trading View

Now, according to recent information from intotheblock, the number of addresses currently in profit for LINK holder is at 100%, which meant there are no traders under a state of loss in the current market scenario.

Source: skew

Along with it being completely profitable, LINK also seemed to be on its own independent trend. According to skew, Bitcoin shared one of the least correlation factors with Chainlink and Cardano at press time. As shown in the above chart, Chainlink and Bitcoin share a negative correlation, unlike other assets that were at least positive with respect to Bitcoin.

In 2020 alone, the asset has registered over 500% in gains that means, it is undoubtedly one of the top growing altcoins of the year. The dominance was such that on August 9th, Link’s trading volume has surpassed Bitcoin’s volume on Coinbase.

Source: Glassnode

With such a meteoric rise, doubts about its legitimacy also started to creep in, hence in order to understand Link’s credibility we analyzed a few other fundamentals.

The above chart represents one of the major factors of the apparent LINK price explosion. As observed, the number of active addresses and non-zero addresses of LINK has increased by almost 1600 percent since the turn of 2020. Traders have been fervently accumulating LINK as the number of non-zero addresses has doubled since March 2020.

Additionally, the chart below indicated that more than 50% of LINK’s circulating supply is currently held in smart contracts, outperforming Tether and Ethereum held in smart contracts on their network.

Michael Anderson, co-founder of Framework Ventures suggested that the rise of Link token is also due to the utilization of the project in terms of scaling the ever-growing DeFi space.

Source: Glassnode

So is there a “BUT”?

The one slightly eye-catching detail reported recently, is the fact that only 100 addresses held 83% of the total LINK supply. That is extremely high considering that the supply of LINK token is 350 million, priced at $12.71 per token at the moment.

With such a large quantity attached to the supply, the possibility of a pump and dump has to be considered on paper but LINK supporters were seemingly not worried at the moment.

In fairness, the project seems to have a strong foundation at the moment, and with the hype behind it, it is plausible the asset will establish new-all time highs going forward.

However, just like every crypto asset, these are unchartered territory for a new token hence, it is important to tread with caution for now.


Biraajmaan is a full-time journalist at AMBCrypto covering the US market. A graduate in Automobile engineering, he writes mainly about regulations and its impact with a focus on technological advancements in the crypto space.
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