Why is Chainlink surging and surpassing Dogecoin in market capitalization?
Chainlink, the leading blockchain oracle network in the cryptocurrency industry, has surpassed Dogecoin (DOGE) to become the 11th-largest cryptocurrency in the market.
Today, LINK has experienced a 6% increase and a 34% surge in the past week, making it the top gainer in the market. As a result of this price surge, LINK has surpassed the $19 mark for the first time since the collapse of FTX in 2022.
It is worth noting that there is a significant correlation between the movement of LINK’s market and its trading volume. According to data from CoinMarketCap, LINK’s trading volume has increased by nearly 100% today.
From a technical standpoint, LINK has broken out of a horizontal trading range that had been in place for almost 90 days. This breakout has put an end to an 85-day consolidation period below resistance, driving the price to over $19.75, its highest level in over two years.
Furthermore, LINK’s Relative Strength Index (RSI) is currently at a significantly low level of 14. This suggests that there could be further bullish momentum followed by a period of corrections.
An RSI of 14 is considered to be highly oversold. The RSI is a momentum indicator used in technical analysis to measure the speed and change of price movements on a scale from 0 to 100. A reading below 30 typically indicates that an asset is oversold, implying that it may be undervalued and due for a reversal or corrective rally. This may present buying opportunities as sellers may have exhausted their positions.
However, while a very low RSI can indicate the potential for a price increase, it is not a guarantee.
On the fundamental side, Chainlink has been focusing on significant upgrades and expansions into traditional finance (TradFi) and real-world assets (RWA). The launch of the Cross Chain Interoperability Protocol (CCIP) and the expansion of Chainlink Data Streams and Chainlink Functions aim to enhance the network’s utility and adoption across various chains and assets.
This strategic effort to integrate with the capital markets and improve transparency and efficiency in the valuation of underlying assets is likely contributing to the positive market response.
