- After retracing by approximately 20% from the local highs, Chainlink (LINK) is surging higher once again. Against the U.S. dollar, the cryptocurrency now trades at $8.33 — a price 7.75% higher than it was 24 hours ago.
- The asset is unfortunately forming a macro reversal signal on its chart that predicts LINK may soon drop once again.
- Further suppressing altcoin gains, analysts expect volatility in the price of Bitcoin and Ethereum to act as a weight on altcoins.
Chainlink Prints TD Sequential Reversal Signal
The ratio between Chainlink and Bitcoin (LINK/BTC) just printed a “sell 9” candle on its monthly chart, per the Tom Demark Sequential.
The Tom Demark Sequential is a time-based technical indicator that prints “9” and “13” signals when an asset has reached an inflection point in its trends. According to the indicator, LINK will likely see a reversal against Bitcoin in the coming months, after having realized strong gains against BTC in the past year.
Chart of Chainlink's macro price performance against Bitcoin by a Telegram channel that tracks Tom Demark Sequential signals. Chart from TradingView.com
The appearance of this macro sell signal comes after a cryptocurrency fund called Zeus Capital released a report claiming that the asset will retrace 99% in the long run.
An excerpt from that report reads as follows:
“Behind the shiny facade of the multibillion dollar project we have exposed signs of absolute lack of interest in building the technology, team that is incapable on delivering what is currently reflected in token’s market capitalziation and a series of market manipulations and plain lies targeting naive investors.”
This bearish sentiment about LINK comes in spite of the underlying project’s fundamental developments. China’s Blockchain Service Network (BSN) revealed in June that it will be using technologies from Chainlink:
“This integration of Chainlink provides BSN users additional security, reliability, and interconnectivity to help fuel even greater growth and adoption of blockchain applications in China and around the world.”
Bitcoin Volatility to Spur Altcoin Retracements
Analysts say that Bitcoin seeing further volatility and upward price action could suppress altcoins’ abilities to rally.
As reported by Bitcoinist previously, Nik Patel, the author of “An Altcoin Trader’s Handbook,” said that there’s a likelihood altcoins will strongly underperform Bitcoin until the asset hits a new all-time high:
“Wouldn’t surprise me to see dominance now rise until BTC all-time highs (pending a confirmed Weekly breakout above $10,600) > break $20k and alts find another bottom (like Nov/Dec 2016) > they rally concurrently like March-June 2017.”
Wouldn't surprise me to see dominance now rise until BTC all-time highs (pending a confirmed Weekly breakout above $10,600) > break $20k and alts find another bottom (like Nov/Dec 2016) > they rally concurrently like March-June 2017.
— Nik Patel (@cointradernik) July 27, 2020
This has been echoed by other market commentators, who say that the capital and attention of cryptocurrency investors naturally gravitate towards Bitcoin if it is volatile.
Featured Image from Shutterstock Price tags: linkusd, linkbtc Charts from TradingView.com Chainlink (LINK) Forms Macro Reversal Signal After Rally 70% in the Past Month
