Skip to content

Due to a massive drop, the price for Chainlink (LINK) rose by 52%

August 9, 2020

Chainlink (LINK) price continues to break new records as the DeFi-related token rose 52% to hit a new all-time high of $ 13.8799 today.

In the last 24 hours The LINK rose 52% from $ 9.05 to $ 13.8799 on Binance.

LINK USDT daily chart

Due to a massive drop, the price for Chainlink (LINK) rose by 52%Due to a massive drop, the price for Chainlink (LINK) rose by 52%

LINK USDT daily chart. Source: TradingView.com

When Chainlink showed an increased upward trend, it was its competitor The Band Protocol (BAND), which also acts as a network for oracles, rose 50% to hit a new all-time high of $ 12.44.

What is behind the rise of Chainlink?

The sudden upward trend of LINK was probably mainly caused by due to the decline in short contracts in the futures market. Since LINK increased continuously, The financing rate remained below -0% and was -0.02%.

The cryptocurrency futures market uses a mechanism called “Funding” to ensure that the market is balanced. When the market turns Buyers need to create incentives for sellers and vice versa.

For example, If there are an overwhelming number of traders selling Chainlink on Binance Futures, the funding rate would go negative. In this situation the headlines Short contracts or sellers must pay long contract holders to hold their positions.

In the last few hours when the price of LINK rose, The refinancing rate for Binance Futures remained negative. This is a sign that as When the price rose, many traders tried to sell the asset.

A continuous loop of short contracts triggered a brief contraction, which in turn boosted buying demand and boosted Chainlink’s momentum.

A pseudonymous trader known as, Benjamin Blunts, stressed that though LINK is theoretically attractive for short positions, market sentiment is bearish. If the market is too crowded to one side, which one in the case of LINK, it was bears trying to sell the asset. this tends to move in the opposite direction.

The dealer said::

“In fact, I would love to be looking for shorts soon, but it seems all my lining is doing the same. I think I’ll wait for another higher boost. At the moment I am not really interested in being in front of the strongest and fastest horse. “

Zeus Capital and his infamous LINK short film

The most important LINK story throughout its run revolved around Zeus Capital. The investment firm has publicly maintained a skeptical stance towards Chainlink. Expect a drastic drop in the LINK price. On August 9 the signing said::

“The narrative“ get rich quick ”is a real indicator of manipulation. You can only win if you sell your $ LINK before it reaches $ 0. “

A cryptocurrency investor named “Light” indicated that Zeus Capital has a large short position on LINK. that apparently there was a risk of liquidation. He said::

“And in another poetic twist in Zeus Capital’s history, LINK was not liquidated for the time being due to price delays on its Aave loan, even though LINK broke its settlement price)”.

It’s not very clear whether a single short seller could have a huge impact on a cryptocurrency with a daily paper volume of $ 2 billion.

Receive Breaking News !

Install
×
Enable Notifications    Ok No thanks