In addition to automated chart patterns, altFINS’ analysts conduct technical chart analyses of top 30 cryptocurrencies. We call these Curated Charts and they evaluate 5 core principals of technical analysis: Trend, Momentum, Patterns, Volume, Support and Resistance.
ChainLink (LINK) technical analysis:
Trade setup: Following a bullish breakout from Channel Down Pattern and above $25 resistance, there are signs of potential reversal of Downtrend. Wait for price to break above 200-day MA (~$28) to confirm. (set a price alert).
Pattern: Price is trading in a Channel Down pattern. Traders typically wait for a breakout and initiate a trade when the price breaks through the channel’s trendlines, either on the upper or lower side. When this happens, the price can move rapidly in the direction of that breakout.
Trend: Uptrend on Short-Term basis, Neutral on Medium-Term basis and Downtrend on Long-Term basis.
Momentum is Bullish ( MACD Line is above MACD Signal Line and RSI is above 55).
OBV (On Balance Volume): is rising, indicating that volume on Up days is greater than volume on Down days. Hence, demand (buyers) exceeds supply (sellers).
Support and Resistance: Nearest Support Zone is $25, then $20. The nearest Resistance Zone is $30, then $35.
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What is ChainLink (LINK)?
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Chainlink is a decentralized oracle network. It aims to serve as a middleware between smart contracts on smart contracting platforms and external data sources, allowing smart contracts to securely access off-chain data feeds.
Chainlink traces its origins back to September 2014, when its parent company SmartContract.com was founded to create a bridge between external data sources and public blockchains. The team eventually developed a product called Chainlink that allows smart contracts to connect to data feeds from any web API and data source. However, SmartContract.com’s original oracle solution for public blockchains relied on centralized oracles, creating what is known as the oracle problem – the problem stemming from smart contracts’ reliance on trusted third parties for external data. In 2017, SmartContract.com attempted to address this problem with the Chainlink network, a new decentralized oracle network.
In September 2017, SmartContract.com (SmartContract Chainlink Ltd) raised $32 million in ICO to build the project. The Chainlink network seeks to bridge external data sources and public blockchains. It connects smart contract platforms to critical off-chain data from markets, events and payments through its decentralized oracle network. Anyone who has a data feed or any other API can join the Chainlink network and undertake jobs to retrieve and provide data to smart contracts. Node operators are paid in Chainlink tokens (LINK) for their services. Node operators will also be able to stake LINK to service certain smart contract requests that require collateral, when staking launches on mainnet. Chainlink’s mainnet went live on Ethereum on June 1, 2019.
Chainlink consists of both on-chain and off-chain components. Off-chain, Chainlink consists of a network of oracle nodes that connect to public blockchains (initially just Ethereum). On-chain Chainlink consists of a series of smart contracts that provide an interface to requesting contracts demanding data feeds. Chainlink’s off-chain component consists of a network of oracle nodes connected to the Ethereum blockchain. These nodes independently harvest responses to off-chain requests. Their individual responses are aggregated via a smart contract on Ethereum, weighted, then returned to a requesting contract. ChainLink nodes are powered by the standard open source core implementation which handles standard blockchain interactions, scheduling, and connecting with common external resources.
Chainlink’s on-chain component consists of of three main contracts: a reputation contract, an order-matching contract, and an aggregating contract. The reputation contract keeps track of oracle-service-provider performance metrics. The order-matching smart contract takes and logs proposed service level agreements (SLAs), which include details such as query parameters (which data feeds to use), the number of oracles needed by the purchaser, collateral required, and uptime requirements, and collects bids from oracle providers. It then selects bids using the reputation contract and finalizes the oracle SLA. The aggregating contract collects the oracle providers’ responses and calculates the final collective result of the ChainLink query. It also feeds oracle provider metrics back into the reputation contract.
The way this flows begins with a user smart contract. User smart contracts broadcast request contracts containing SLAs defining parameters for the data request. Node operators who monitor the Ethereum blockchain for these request, then bid to service them using the order matching contract, which both collects bids and logs the SLA parameters. Users can also select specific node operators manually through either the Chainlink core team marketplace or third party marketplaces for matching requests. Once matched with a request node operators, node operators return external data to the aggregating contract, which aggregates data from operators into a single weighted value, sends performance metrics to the reputation contract, and then reports the single weighted value back to the smart contract that requested it. In exchange for their services, node operators are compensated in LINK. LINK is currently built on Ethereum, although it plans to integrate with all smart contract networks later on its roadmap.
Supply Curve Details
LINK’s outstanding supply is fixed. Although the Node operators rewards (35% of the total supply) haven’t yet been distributed, they are nonetheless liquid as there are no signs that they are locked within any kind of contract. Nodes get rewarded to retrieve and provide data, and the rewards are determined by the contract creator.
Asset profile is provided by messari. Original version can be found at Messari