- Massive short-squeeze sent ChainLink skyrocketing on Saturday.
- The explosion higher lifted LINK/USD to the sixth most dominant crypto asset.
- Bulls take a breather after the extensive rally, what’ next?
Since, the onset of August, ChainLink (LINK/USD) bulls have been unstoppable and their commitment only got stronger after the Ethereum-based altcoin exploded higher by 52% on Saturday, recording the biggest daily gain ever to reach all-time-highs at $13.66. The rally comes after the coin booked nearly 22% loss from highs in the month of July.
The main catalyst behind the sudden spike was ‘short-squeeze’, as millions of dollars’ worth of on-chain Chainlink short positions were partially or fully liquidated. The rally picked-up pace after reports hit across the CryptoTwitter space that the short positions were covered up on Aave platform.
“The most notable of these short positions was one worth approximately $20 million before Aug. 8. The short position was purportedly entirely liquidated when LINK spiked above $14, with DeFi dashboards indicating the address’ “net worth” is $299.66,” per Cryptoslate.com.
On the extreme strength, a pseudonymous trader, Benjamin Blunts, explained: “I actually would be inclined to start looking for shorts soon, however it seems my entire feed is doing the same. So I will wait for another push higher I think, not really interested in standing in front of the strongest, fastest horse right now.”
Meanwhile, Zeus Capital, the most underweight on ChainLink, said this morning, “The ‘get rich fast’ narrative is a true indicator for manipulation. You can only win if you sell your $LINK before it goes to $0.”
With the parabolic uptrend seen over the past week, the coin has reached the sixth position amongst the widely traded cryptocurrencies by market capitalization. At the press time, the No. 6 coin trades modesty flat around $12.65 region, as the bulls struggle to regain the $13 barrier.
LINK/USD: Daily chart
With such kind of unusual surge, it’s difficult to predict the scope of further upside. The Relative Strength Index (RSI) on the daily chart has turned flat within the overbought territory, which likely suggests buyers’ exhumation.
Hence, pullbacks/ profit-taking declines cannot be ruled out in the short-term. The price remains supported at $12.00, the 23.6% Fibonacci (Fib) Retracement level of July 27 – August 8 uptrend, so far this Sunday.
The next cushion awaits at $11.00, the 38.2% Fib level of the same rise.
Alternatively, a break above the $13 mark could expose the record highs once again, with a test of the $14 threshold on the cards.