Chainlink Price Analysis: LINK Hugs Along The 20-day SMA

Daily Chainlink LINK Price Forecast

Last Updated July 23rd 2021
3 Min Read
  • Chainlink price volatility decreasing as per the Bollinger Band.
  • The MACD shows increasing bearish market momentum.
  • Between April 25 and May 9, the Chainlink price jumped from $31 to $52, gaining ~65% in its overall valuation. During this upward surge, LINK managed to flip the 20-day SMA from negative to positive. However, LINK met resistance at the upward Bollinger Band and crashed to $41.50 over the next three days. 

    Chainlink Price Sits On Top Of 20-day SMA

    Since May 12, the Chainlink price is sitting on top of the 20-day SMA and has gone up to $44.50. The Bollinger Band has started contracting, which shows decreasing price volatility, plus the MACD shows increasing bearish market momentum. So, don’t expect any drastic surges any time soon.

    Image: LINK/USD daily

    LINK/USD daily chart 051421

    As you can see, the Chainlink price has healthy support at the 20-day SMA. Previously, at this level, >7,800 addresses had purchased almost 15.5 million LINK tokens. 

    Image: IntoTheBlock

    LINK/USD volume chart 051421

    Can Uniswap Provide A Better Oracle Than ChainLink?

    Vitalik Buterin, the co-founder of Ethereum, recently said that there is the necessity of a centralized price oracle with a high market capitalization to make any attack prohibitively expensive. He drew UNI as an example.

    On the Ethereum network, ETH is used as gas to facilitate transactions and as a reserve currency. Most pairs on the Uniswap exchange use ETH as the second asset. To secure any protocol running on Ethereum, DeFi needs a reliable price oracle for the ETH/USD pair to protect it from oracle attacks. 

    Understanding the real-world value of ETH/USD is not as easy as simply looking at the ETH/USDC price on Uniswap, nor an average of ETH/USDC, ETH/USDT, ETH/GUSD as that would only improve the security of the ETH/USD price slightly.

    Currently, Chainlink is the leader in oracle networks, but Buterin believes that Uniswap could create a better alternative with a better incentive system to ensure reliable price feeds. While Chainlink is working to build a complex oracle network that can provide reliable on-chain information to smart contracts, Buterin said that a more minimalist alternative would be best for the price of ETH/USD. 

    According to the co-founder, UNI would be an ideal candidate as the market capitalization of the DeFi token is around $22 billion, making any attack extremely costly. While the efficiency might not be at the level of Chainlink yet, the main hurdle in building a reliable oracle lies in its security. 

    The value of UNI would be used to guarantee the price feed of the oracle, requiring a certain amount of UNI to force the price feed into relaying fake information. The cost of accumulating enough UNI tokens to provide a duplicate price for ETH/USD to create an opportunity for an oracle attack would be prohibitive and discourage any hackers. Buterin's idea also stands as a testament to the growth of DeFi and the broader Ethereum ecosystem. 

    Chainlink Price Is Expected To Reach These Levels

    The Chainlink price will need to cross the $47.20 resistance barrier and take down the $50 psychological level and reach its all-time high ($52.88) level again.

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