Chainlink is a very popular cryptocurrency because it connects blockchain with real-world data. It is a decentralized oracle network that allows external data from a wide range of services to capitalize on the smart contract facilities.
Smart contracts are a computer protocol; the main purpose is to negotiate a contract and ensure it is verified. However, smart contracts have some limitations. It does not verify the external data or real-world information. Chainlink connects this off-chain data with on-chain data, and it uses a broader network to provide information from various external sources.
Off-chain transactions are gaining popularity now, so the role of networks like Chainlink is increasing.
LINK is the token of Chainlink, it is an ERC-20 token, and it cannot be used in key network operations. It is used only to pay for oracle service.
Now let’s find more information about the technical analysis of LINK.
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At the time of writing this post, it is trading at $19.80. Indeed, it is a good chart, and it rises from a support level of $18. On the daily chart, MACD is bullish along with the RSI.
However, the Bollinger Band is neutral because today’s candlestick is forming in the lower part of the BB. The Moving Average line is also downward as the last two candlesticks formed below the MA line.
In May, it reached its ATH; it has formed two higher highs and lower highs. Now it has formed an M-shape.
Indeed, $23 is the strong resistance level of the token; if it moves upwards, it will face the resistance level again. Considering the MACD pattern, it will not cross this level soon.
However, it may come down to the support level again, and if it breaks the support level, the next level will be $14.
During the pandemic, cryptocurrency has been bullish throughout the year. Will it continue its bull run even in the next year? If you want value investing, you need to understand the future potential.
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Chainlink has a lot of potentials, and it benefits the end-users by providing a high-level security system and authentic data sources. It also comes with the potential of scalability.
For long-term investors, it is the ideal time to enter. It is not in the overbought or oversold zone, and RSI is stable and consolidates around the support level. If you want to invest, you can buy it for around $18, with a stop loss of $13.
