- Chainlink plunged during the Thursday trading session in what appears to be a sell-off caused by profit-takers.
- The latest decline appeared as a part of a downside correction that started a day after Chainlink set an all-time high at $8.93.
- Meanwhile, favorable fundamentals in the form of new strategic partnerships kept the token above crucial support levels.
Chainlink (Ticker: LINK) fell hard on Thursday, but it failed to convince traders about a full-fledged downside move.
The eighth-largest cryptocurrency by market cap declined by more than 4.5 percent to $8.22 as of 12:18 GMT. The plunge surfaced a day after it established an all-time high at $8.93. That prompted daytraders to sell the top and secure short-term gains, causing a downside correction.
Chainlink corrects lower from its ATH. Source: TradingView.com
The sell-off appeared modest for a cryptocurrency whose price rallied 95 percent in just ten days of trading. In contrast, Dogecoin, a rival altcoin, crashed by more than 50 percent following its artificially-created price pump last week.
New Partnership Keeps Bulls Hopeful
Chainlink limited its bearish bias in the wake of partnerships that intends to boost LINK’s adoption among other firms. The DeFi platform announced earlier Thursday that it is offering its decentralized oracle solutions to KardiaChain.
Blockchain platform @KardiaChain is onboarding #Chainlink as its recommended oracle solution. KardiaChain will start out using Chainlink to obtain sports data from LiveSports & other Vietnamese data providers to power its eSports prediction market. https://t.co/JZN65tdGYp
— Chainlink – Official Channel (@chainlink) July 16, 2020
The beneficiary blockchain project acknowledged that Chainlink’s real-world data and traditional infrastructure would assist their decentralized applications to perform better. Excerpts from their announcement:
“We plan to explore how some of Chainlink’s more advanced functionalities around privacy and single-source data validation can be applied to real-estate, enterprise, and government solutions.
The partnership expects to grow LINK’s demand. The cryptocurrency operates both as a work and a payment token. So it seems, KardiaChain will pay Chainlink node operators in LINK to receive oracle services. Meanwhile, it can also opt to become a node operator itself by staking LINK as collateral.
Chainlink entered similar high-profile partnerships in recent weeks. The most notable among them was China’s Blockchain Service Network. (Read more: Chainlink to Work With China’s National Blockchain Services Network)
The Chainlink’s 10-day rally holds its gains also because of the growing DeFi hype. As a decentralized oracle network, a majority of Chainlink’s clientele belongs to the Decentralized Finance space. So far, it has boarded big DeFi projects, including Accord, bZx, Factom, Synthetix, and others.
The native tokens of the platforms mentioned above have rallied exponentially in 2020. It is safe to assume that the buying sentiment in DeFi spilled over into the LINK market.
But the parabolic rallies in the cryptocurrency market remain notorious. Traders tend to sell tokens at their local tops to seek opportunities in assets that are in the process of bottoming out. Chainlink traders may have to keep their ideal stop losses prepared, in case a dump appears.