LINK investors make their first profit in 2 months, but how long will it last?
As the overall market slowly begins to recover, altcoins like LINK are also showing bullish signals. But while the attractive yields are attracting new investors, several other factors suggest they won’t get as much as expected.
SHORTCUT Thousands of thin ice?
For any asset, the most important factor is always the growth of the network, and Chainlink is a leader on this front. In the past few days, Chainlink products have become widespread across the crypto space as they are deployed by decentralized applications on every chain, not just Ethereum and BSC. The latest of these are Avalanche, Fantom and Polygon.
As the network continues to grow, investors are also benefiting from increased adoption due to the recent price recovery.
About 10 days ago, LINK broke its downtrend again, but good results are expected this time. As the price action tests the critical $25.2 resistance, LINK has a chance to rally as the downside strength appears to be fading, according to ADX.
LINK price action | The source: trading view
The rally helped LINK break its downtrend and also helped nearly 30% of investors recover from losses in November and December.
The network’s first real gain in over 2 months could attract a flood of new investors into the asset.
Chainlink Network receive benefit real after 2 months | The source: mood
Also, the low network speed is a sign that investors are focusing on HODL instead of taking profits. So new investors may have similar intentions.
speed belong SHORTCUT | The source: mood
Next, the only concern would be LINK’s correlation with Bitcoin, which currently stands at -0.68. A month ago this would have been a bullish scenario. But for now, the king coin is on the verge of a possible recovery. Therefore, a negative correlation at this point will cause LINK to decrease instead of increasing.
BILLIONCorrelation of LINK with Bitcoin | The source: Into the block
So, in the future, this will be an important indicator to understand the probability of loss when investing in LINK.
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