CryptoChipy Ltd will analyze the DOT price forecasts from both technical and fundamental perspectives. It’s important to remember that there are numerous factors to consider when entering a trade, including your risk tolerance, time horizon, and leverage if using margin.
US Central Bank Likely to Raise Key Rates Further
Chainlink is a decentralized oracle network providing real-world data to blockchain-based smart contracts. These smart contracts, often used to replicate bonds or insurance agreements, need access to external market data, which Chainlink helps deliver by incentivizing “oracles” (data providers) to act as bridges between smart contracts and outside data sources.
Built on a flexible framework, Chainlink can retrieve data from any API. Each oracle is incentivized to provide accurate data, with a reputation score assigned to each oracle. Nodes that follow the software rules and provide useful data are rewarded in Chainlink’s native cryptocurrency, LINK.
The project is growing in popularity, with numerous developers, researchers, and users utilizing it. For instance, COTI (CRYPTO: COTI) recently announced it would use Chainlink Keepers to fully automate payouts to liquidity providers. Yoni Neeman, COTI’s Chief Innovation Officer, stated:
“Chainlink Keepers allow us to offer a fully trustless solution for users. When the protection reaches its expiration time, users automatically receive a payout for any IL incurred on their liquidity, directly into their wallet as USDC! The payout is done in a decentralized manner via Chainlink Keepers.”
Recently, Chainlink also reported that LINK was listed on Robinhood (NASDAQ: HOOD), which caused a brief surge in its price. However, the risk of further declines for Chainlink (LINK) remains, as Commerzbank economist Christoph Balz predicts that the US central bank will likely need to raise key rates further to control inflation.
While rate hikes aim to curb inflation and stabilize the economy, there are concerns that such measures could push the economy into a recession. Riskier assets, including stocks and cryptocurrencies, tend to suffer under these conditions, and assets like Chainlink (LINK) are affected by the US central bank’s tightening policies.
Technical Analysis for Chainlink (LINK)
Following highs above $18 in April 2022, Chainlink (LINK) has experienced a decline of over 50%. The price is now holding steady above the $6 support level, though a drop below this point could push LINK towards the next support level at $5.
As shown in the chart below, the trendline indicates that as long as Chainlink’s price remains below this trendline, we cannot confirm a trend reversal, and LINK remains in the SELL-ZONE.
Key Support and Resistance Levels for Chainlink (LINK)
The chart from December 2021 highlights the primary support and resistance levels that traders can use to predict potential price movements. The more frequently the price tests a support or resistance level without breaking it, the stronger that level becomes. If the price moves past resistance, it may become a new support level.
Currently, Chainlink (LINK) is in a “bearish phase.” If the price surpasses $10, it could signal a trend reversal, with the next target at $12. The key support level is at $6—if the price falls below this point, it would signal a “SELL” and could lead to further declines toward $5. If the price drops beneath $5, which is a solid support level, the next target could be $4.
Factors Suggesting a Rise in the Chainlink (LINK) Price
Chainlink (LINK) has surged by over 20% since July, moving from $5.90 to $8.20. The volume of LINK traded recently has increased, and if the price rises above $10, the next target could be $12.
Traders should also note that Chainlink’s price is closely linked to Bitcoin’s price movements. If Bitcoin surpasses $25,000, Chainlink (LINK) could potentially rise to $9 or $10.
Indicators of Further Decline for Chainlink (LINK)
While Chainlink (LINK) is currently above the $6 support level, any break below this point could suggest a move towards the key support at $5. The price of Chainlink (LINK) is also strongly correlated with Bitcoin, and when Bitcoin’s price falls, it typically impacts LINK negatively.
Price Expectations for Chainlink (LINK) from Analysts and Experts
With inflation at a 41-year high and central banks tightening monetary policies globally, experts predict that riskier assets like stocks and cryptocurrencies may continue to experience losses. Commerzbank economist Christoph Balz believes that the US central bank will likely need to raise key rates significantly further to control inflation. Though these rate hikes aim to stabilize the economy, some investors worry that they may cause a recession. Chainlink’s price is also influenced by Bitcoin’s movements, and if Bitcoin’s price falls below $20,000 again, LINK could reach new lows.
