While all eyes are currently on Bitcoin, the 5th largest cryptocurrency by market cap LINK is experiencing a slowdown amid a wider market plunge. Of the top 10 cryptocurrencies on Coingecko, Chainlink (LINK) had the highest percentage decrease in the last 24 hours at 11%.
Currently, at oversold levels, LINK has operated above the Bollinger line and oversold levels in the last 16 days. Exhaustion could be around the corner because yesterday, it crashed from $18.82 to $15.64, a level LINK last saw and conquered 5 days prior. While the crash coincided with Bitcoin’s ascent above $12,000 (which is usually the case: when Bitcoin makes a big move upwards, altcoins normally take a backseat,) LINK almost did not move today, currently settling at $16.79.
According to data aggregator Santiment, LINK’s drop is unprecedented and independent from the rest of the crypto market. What has been going on in the background, however, is that the supply of LINK on exchanges has been shrinking in the last few months.
Santiment theorizes that the LINK army (or LINK marines, as they are called on Twitter) are not selling and that more and more of the supply is being moved out of exchanges and into offline wallets. Just like the old law of supply and demand, the increase in demand will lead to a price increase if the supply continually decreases, assuming ceteris paribus (all other things being equal).
However, the popular trader known as ‘CryptoWhale’ argues that LINK has already grown exponentially and its price has shot well beyond its intrinsic value because of the hype in decentralized finance “and greed,”.
CryptoWhale classified LINK as a bubble and that investors are currently being drawn towards the cryptocurrency because of herding, or the tendency of humans to follow what others are doing. Also, the analyst noted how celebrities have begun talking about LINK and how the mainstream media has started reporting about it.
The trader made a number of arguments on why LINK is in a bubble but ultimately, he cited the main problem of the 5th largest cryptocurrency: Coin Supply Concentration.
“Considering 70% of the coins supply is held by 9 whales, it’s likely they will begin dumping on Investors once they’re ready to take profits,” CryptoWhale said in a tweet. Finally, he warned that predicting the top is almost impossible. “But we know how it will end. Once the hype subsides, panic will take over,” he added.
