2020-11-8 04:00 |
Chainlink’s price has been bearing witness to some immense volatility throughout the past few days and weeks, with buyers propelling it towards $14.00 yesterday while the entire DeFi sector saw some explosive momentum.
However, the token is now facing some intense selling pressure, with the entire crypto market starting to turn lower as buyers struggle to maintain the momentum seen throughout the past couple of days.
This market-wide downturn comes as Bitcoin breaks below $15,000, which has far-reaching implications for the aggregated market.
ETH is also trending lower, losing its $450 support level and declining towards $430. It is important to note that both Ethereum and most DeFi blue chips are still trading well-above their recent lows.
YFI, for instance, rallied from lows of $7,500 to highs of $18,000 before losing its momentum and declining all the way down to $12,000 – where it is currently trading at.
This market-wide downturn has struck a blow to LINK’s ascent, but the token could still be well-positioned to see a strong rebound when the market conditions shift back into buyers’ favor.
One analyst is pointing to Chainlink’s high funding rates as one reason why it may see a sustained pullback in the short-term.
Chainlink Reels Following Massive Multi-Day UptrendAt the time of writing, Chainlink is trading down over 2% at its current price of $11.80. This is around the price at which it has been trading throughout the past few days.
It does mark a decline from its overnight highs of nearly $14.00 that were briefly tapped when the aggregated market surged on the heels of YFI’s move from $7,500 to $18,000.
The intensity of this rally created a tailwind for all Ethereum-based altcoins that reside within the DeFi sector, but Bitcoin’s plunge below $15,000 today has struck a blow to this momentum.
LINK Funding Rates Rocket Following Latest RallyOne factor that could be driving this ongoing Chainlink downswing is the high funding rates that have come about due to this rally – something mused by an analyst in a recent tweet.
“Funding has now hit and the rate is still 0.1198% which is incredibly high. I think macro link has legs but for now it needs to retrace a little to even it out a bit. It’s just too crowded at the moment. The last omega run up on link funding was actually negative and flat,” he explained.
High funding means that the number of long-positions far outweigh the number of short-positions, making it a crowded trade.
Featured image from Unsplash. Pricing data from TradingView.Similar to Notcoin - Blum - Airdrops In 2024
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