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The cryptocurrency altcoin known as Chainlink has had a banner year, bringing investors in the project gains of over 1,100% from trough to peak.

However, a violent selloff has begun in the asset, with investors taking profit following incredible returns it amassed throughout the year. The price action closely mimics a Wyckoff distribution schematic that suggests the selling will continue in the foreseeable future.

A Look Back At The Altcoin’s Year of Strong Performance

Ever since the crypto hype bubble popped, stories of crypto investors becoming rich overnight have all but dried up and have become little more than myths or fairytales harkening back to the days where irrational exuberance took control over the mainstream public.

But every now and again, an altcoin will come along that disrupts the industry and shocks the crypto community with massive gains. This year’s poster child for crypto moonshot is none other than Chainlink.

Related Reading | Ripple and Stellar Lead List of Worst Performing Altcoin Assets Year To Date

Starting off the year, talk of Google utilizing the altcoin got the world buzzing and the price skyrocketing.

Chainlink began 2019 at a price of roughly 29 cents per LINK token, and shortly after ballooned to $3.70 each. As is the case with any parabolic rally, the asset had a deep correction, but later found support and rallied once again.

After setting a third and final top, the crypto asset has been on a steady descent, and according to a comparison with the Chainlink price chart and a Wyckoff distribution schematic, the selling may only just be starting.

Wyckoff Theory Suggests Chainlink Distribution Has Only Just Started

According to Wyckoff theory, created by iconic analyst Richard Wyckoff, financial assets go through four distinct price action phases: accumulation, mark up, distribution, and mark down.

The accumulation phase would have occurred while Chainlink was at low prices near its bottom at the start of the year, and the mark up phase would have followed, taking the price of the asset to its all-time high.

But once it got there, profit-taking turned the tides, the trend reversed, and a selloff is now underway. If distribution is now in full effect, Chainlink’s price should continue to drop for the foreseeable future in a mark down phase.

Related Reading | Chainlink 2019 Gains in Danger, Massive Transfer of Wealth Incoming? 

And with investors with so much room overhead for the asset to drop and still sell at a profit, the distribution could go on for a long time, until the asset’s price becomes attractive enough for altcoin investors to begin to re-accumulate once again.

Chainlink is currently trading at $2.09 cents, according to CoinMarketCap, down from its all-time high of $3.70 at its peak.

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Tony Spilotro , 2019-12-03 20:00:27

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NewsBlock © 2019 - 2020 All rights reserved.

NewsBlock © 2019 - 2020. All rights reserved.


While Bitcoin’s price seemingly moves without rhyme or reason — collapsing by dozens of percent and embarking on face-melting rallies on a whim — the cryptocurrency market is filled to the brim with fractals.

Related Reading: Analyst: Bitcoin Price Likely to Fall to Low-$8,000s as Chart Remains Weak

A brief aside: A fractal, in the context of technical analysis and financial markets anyway, is when an asset’s price action is seen during a different time. This form of analysis isn’t that popular, but it has proven to be somewhat valuable in analyzing Bitcoin.

One recent fractal popularized by a well-known cryptocurrency trader is implying that BTC is going to return to the low-$7,000s in the coming days.

Bitcoin Fractal Implies Retracement to Low-$7,000s

A well-known crypto trader going by “Tyler Durden” on Twitter recently posted the chart below, which shows that a Bitcoin price fractal may be playing out. The fractal has four phases: horizontal consolidation marked by one fakeout, a surge above the consolidation phase, a distribution, then a strong drop to fresh lows.

If the fractal plays out in full, BTC could reach the low-$7,000s again, potentially as low as $7,100. This would represent a 20-odd percent collapse from the current price point of $8,800.

It isn’t only a fractal that is hinting Bitcoin has the potential to visit its lows. As we reported on Saturday, Bloomberg believes that if the GTI Vera Convergence Divergence Indicator flips red, a downtrend could push the cryptocurrency back to $7,300.

Related Reading: Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?

Can Bulls Step In?

But again, many believe it is irrational to have such bearish interpretations of the cryptocurrency’s chart at the moment. As reported by NewsBTC earlier, Popular crypto trader Mayne recently noted that the “people waiting for $6,000” are irrational. He quipped that Bitcoin retracing and consolidating after its fourth-biggest bull move in history ($7,300 to $10,500, a 42% gain) is perfectly par for the course, but noted that it’s totally possible we can go lower from $8,800.

The medium-term technicals support this.

Trader and CoinTelegraph contributor FilbFilb found that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses.

Also, a Bitcoin price model created using Facebook Prophet machine learning found that the leading cryptocurrency is likely to end the year at just over $12,000. What’s notable about this model is that it called the price drop to $8,000 months in advance, and forecasted a ~$7,500 price bottom for BTC.

To put a cherry on the cryptocurrency cake, Crypto Thies observed that when Bitcoin bottomed at $7,300, it bounced decisively off the 0.618 Fibonacci Retracement of the move from $3,000 to $14,000, which correlates with the two-week volume-weighted moving average. He added that summer 2019’s consolidation was marked by Bitcoin flipping major resistances into support levels, implying that a bullish reversal and subsequent continuation is likely possible in the coming weeks.

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Nick Chong , 2019-11-10 12:00:38

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