- Chainlink price plunged by >$15 this Wednesday.
- MACD shows increasingly bearish market momentum.
The Chainlink price recovered a bit to $42.50 this Tuesday, following a weeklong crash from $52.25m to $37 between May 10 and May 17. However, this valiant fight back by the buyers was instantly eradicated by the sellers this Wednesday.
Chainlink Crashes To 200-day SMA
The Chainlink price crashed from $42.50 to $25 losing nearly 40% of its overall valuation. As things stand, LINK has crashed below the Bollinger Band and is sitting on top of the 200-day SMA.
The MACD shows increasing bearish momentum and the Bollinger Band has started expanding to indicate increasing volatility. These two indicators tell us that the 200-day SMA is going to be severely tested today.
Image: LINK/USD daily
As you can see, the Chainlink price faces crucial support at the 200-day SMA ($24). Previously, at this level, 7,500 addresses had purchased almost 12 million LINK tokens.
Chainlink Founder Sergey Nazarov On Crypto Subsector
Sergey Nazarov, the CEO of Chainlink Labs, recently said that the nascent decentralized finance (DeFi) space could emerge as a primary competitor of banks and fintech firms. At the recent LendIt Fintech Conference, Nazarov noted that DeFi is not going away and will likely achieve a significant portion of the market that banks and fintech firms currently control.
The Chainlink co-founder argued that users will be drawn to DeFi platforms such as Aave (AAVE) over legacy financial institutions because of the superior return on investment.
If you’re a bank, if you’re a fintech I would strongly recommend that you ask yourself when and why users will want to use decentralized financial products. Here’s one answer – a bank can give them 1%. On Aave, they can get 8%. The only reason they’re not on Aave is because they don’t know how to get on Aave.
Nazarov added that DeFi offers users increased transparency and control relative to traditional financial institutions. The Chainlink Labs CEO also advised traditional financial institutions to offer their customers user-friendly access to DeFi platforms to stay relevant.
If you want to keep owning those user relationships, you all know that you have to keep giving the users what they want. And if the users want cryptocurrency now, what they’re going to want soon is the ability to earn interest on their cryptocurrency. And then they’re going to want to be able to use their cryptocurrency in protocols related to derivatives and so on and so on.
Chainlink Price Is Expected To Reach These Levels
The Chainlink price will likely break below the 200-day SMA. If this happens then the $20 psychological level becomes absolutely crucial.