A Brief History!
Chainlink is a decentralized oracle network created with the goal of serving as a broker between smart contracts and external data sources. It basically connected your smart contracts to the outside world. The Chainlink protocol was launched in September 2017 and officially launched in May 2019.
As smart contracts are decentralized in nature, one cannot revolutionize the DeFi because of the centralized information in real life. This is the issue Chainlink intends to solve; hence they are trying to create a decentralized oracle network, which will be responsible for providing accurate real-world data to decentralize the information required for creating truly decentralized smart contracts.
The recently released Chainlink 2.0 whitepaper focuses on expanding the capabilities of Decentralized Oracle Networks. It describes the evolution path of the ChainLink network. It now attempts to provide tamper-proof data delivery and secure off-chain computation. Chainlink oracle networks ensure and help create highly scalable smart contracts without compromising privacy. Off-Chain reporting, a recent scalability upgrade of the Chainlink network, has lately reduced the gas costs of oracle updates by 90%, representing the first progress towards accomplishing the goals laid out in the whitepaper.
Price Feeds – Access financial market data needed to power the DeFi economy
Verifiable randomness – Helping create dynamic NFTs and on-chain gaming applications
Proof of reserve – Providing proof of off-chain collateral, backing stable coins and cross-chain tokens
Keeper Network – Transaction automation bots providing autonomous DevOps services.
Chainlink Technical Analysis
While this crypto asset is in the red, there are signs of reversal taking place. But once will have to wait for their signs to turn into signals before making a fresh entry at these positions. A breakdown of current support levels placed near $15 can be devastating for the Chainlink valuations.
100 Day Moving Average- $31.42
200 Day Moving Average- $26.99
Support Levels- $15
Chainlink has been in a downturn since May 10, 2021, when it touched all the high values of $53.14. But the ensuing downtrend forced Chainlink towards the lower levels of $15, erasing over 60% of its valuation within two weeks. In a brief time frame of two weeks, Chainlink hits a new low of $15 on May 23. The revival pushed Chainlink price to $34 before resuming the downtrend again.
Chainlink again bounced from the lows of $15 on 22nd June. While there have been multiple reversals from the $15 levels, this price value has been reached after breaching two of its most important moving average lines, the 100 DMA and 200 DMA. Hence it becomes obvious that Chainlink is not trading as per the usual mathematical levels and valuations, which makes it highly volatile. Timing the entry in this cryptocurrency is of utmost importance as there can be huge retracements.
For now, this crypto asset has maintained a distance from breaching its support placed at $15, but one should not average this asset in case of a fall below $15 and wait for some recovery before making a fresh entry. Make your move according to the trend as sometimes, crypto’s breach the traditional moving angle and can be highly volatile.
Although four days of consistency and closing in green adds some amount of confidence, the main challenge for Chainlink will be breaking through the resistance at the 200 and 100 days moving average to resume its uptrend and reach the higher valuations. For fresh entry, traders should keep an eye for it to reach above $20 and stay over it on hourly candles without changing color.
MACD on long chart frames indicates a mild golden crossover-type event that could become significant if it manages to give a closing above the 200-day moving average placed around $27. It counts for a 35-40% up move from current values, which is for sure eye candy for investors.
Chainlink is much stronger on the hourly charts, consistently making higher highs after each pullback. With the rise in trading volumes, it wouldn’t take Chainlink much time to reclaim the 200-day moving average. Once that happens, we can witness a strong pullback in its valuations.
RSI is also in the green zones indicating a positive buying trend. It is currently showing a histogram level of 64.5. It is great, considering this cryptocurrency recently hit a five-month low. However, investors should trade with caution and should not put all their money in a single trade.