Chainlink price has seen some huge volatility over the course of the past few days and weeks, with buyers pushing it to $ 14 yesterday while the entire DeFi sector sees some momentum exploding. However, LINK is currently facing some fierce selling pressure, with the entire crypto market starting to depreciate as buyers struggle to maintain the momentum seen over the past few days.
LINK/USD 4-hour chart | Source: TradingView
The overall market downturn dealt a blow to the Chainlink price rise
This market-wide downturn occurred when Bitcoin dropped below $ 15,000. ETH is also trending lower, losing support at $ 450, and dropping to $ 430. It is important to note that both Ethereum and most DeFi tokens are still trading above their recent lows. For example, YFI rallied from a low of $ 7,500 to a high of $ 18,000 before losing momentum and plummeting it all to $ 12,000.
This all-market downturn dealt a blow to LINK’s rise, but the token may still be well-positioned to witness a strong rebound as market conditions turn in favor.
At press time, Chainlink is trading down more than 6% at its current price of $ 11.99. This is the price at which it has been trading for the past few days. It marked a drop from an overnight high of nearly $ 14 that had been briefly mined as the aggregate market rose following YFI’s move from $ 7,500 to $ 18,000.
The intensity of this rally created a blast for all Ethereum-based altcoins in the DeFi sector, but Bitcoin’s drop to below $ 15,000 today dealt a blow to this momentum.
One factor that could be driving this ongoing Chainlink decline is the high funding rate due to this rally – something one analyst mused in a recent tweet.
Analyst NekoZ said:
Funding has now hit and the rate is still 0.1198% which is incredibly high. I think macro $link has legs but for now it needs to retrace a little to even it out a bit. It’s just too crowded at the moment.
The last omega run up on link funding was actually negative and flat.
— NekoZ (@CryptoNekoZ) November 7, 2020
High funding means that the number of long positions is much longer than the number of short positions, making it a crowded trade.
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