The price of LINK, the native cryptomoney of Chainlink, has increased by 10% in the last three days and the recovery occurred despite a “death cross” or “death crossover” on the LINK / BTC pair chart.
Josh Olszewicz, cryptocurrency trader and technical analyst, said the LINK / BTC chart found its first death crossover since 2018.
What is a “death cross” and why is LINK showing relief in its bull run?
In technical analysis, the term “death crossover” is a candlestick chart formation that typically occurs before a big sell-off. It comes on when the short-term moving average of an asset falls below its long-term moving average.
This formation usually indicates a short-term trend reversal.as it tends to arise when an asset experiences a pronounced correction.
From November 23 to December 11, LINK price decreased by around 30% in 17 days. Due to its sharp short-term decline, the death cross appeared on the LINK / BTC pair chart. LINK’s short-term moving average fell below its long-term moving average for the first time in two years.
— Josh Olszewicz (@CarpeNoctom) December 10, 2020
But a relief rally is likely if the asset begins to rebound strongly from the death cross. Since the indicator appears after an asset experiences a major pullback, the likelihood of a major short-term uptrend also increases as the death crossover materializes.
On December 13, fueled by the recovery of the decentralized finance (DeFi) market, LINK posted a 10.5% rally in 12 hours. LINK has been consolidating since then, but the initial relief rally could lead to a broader uptrend if LINK price sustains above the $ 12.3 support level.
Chainlink’s fundamentals remain strong
In essence, Chainlink is an Oracle network that provides relevant market data for DeFi applications.
Most of the major DeFi protocols rely on Chainlink’s oracles for information that is used in loans and other financial applications.
Ryan Selkis, the founder of Messari, noted that Oracle’s infrastructure is very important to DeFi. Although its valuation is still high, Selkis said he recognizes the importance of data to DeFi. He said:
“Although we do not believe that LINK is DeFi, Oracle Infra is critically important (and frequently exploited). Chainlink kills him on the associations front. I don’t take in the economy at $ 10 billion, but I understand the importance of reliable DeFi data conduits. “
One of LINK’s main catalysts is its continued partnerships and collaborations in the DeFi space. Just in the last two days Unilayer Y Dock they integrated the Chainlink oracles into their DeFi platforms.
Chainlink is now live on #BinanceSmartChain as their recommended oracle and used by @BreederDodo on BSC mainnet. Developers now can build smart contract applications on BSC with native access to #Chainlink oracles like Price Feeds. https://t.co/mYFFVWsjnl
— Chainlink – Official Channel (@chainlink) December 10, 2020
In particular, Binance Chain integrated Chainlink’s Oracle network on December 10, which allowed all decentralized applications on the blockchain to use Chainlink. A blog post from Binance He said:
“Binance Smart Chain (BSC) has successfully integrated Chainlink’s decentralized Oracle network into its mainnet as its recommended oracle solution. As a result, Chainlink is now available for use by each and every BSC smart contract. “
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How could Chainlink rebound despite LINK price ‘death crossover’?