- After rising 164%, LINK could once again be the biggest beneficiary of the RWA story.
- Whales continue to show interest in the project.
Chainlink’s [LINK] The performance in 2023 is one that AMBCrypto found difficult to overlook. For some, the point of contention was the incredible rise in LINK’s value.
However, according to our analysis, the hype surrounding the project is more than just the price action. That is also one of the reasons why Chainlink is one of the projects that participants are looking forward to as the market heads into 2024.
This year, Chainlink was not in a sorry state like most crypto projects, implying that the project has not been sleeping on its development. This was clearly visible in Sergei Nazarov’s rack on January 19.
According to Nazarov, Chainlink’s plans for this year revolved around the adoption of its Oracle network. For context, Chainlink uses the Oracle network to connect blockchains to off-chain data.
However, there was one area that the Chainlink co-founder touched on that has been the focus of much of the crypto market – and that is the tokenization of Real World Assets (RWAs).
This process involves the use of digital tokens to represent ownership and legal rights to a property on the blockchain.
Regarding the development, Nazarov noted that:
“Programmable assets can generate rewards, serve as collateral, integrate into play-to-earn games, support derivatives and more. As the connection point between traditional systems and blockchain systems, Chainlink holds a key position in this tokenization megatrend.”
Are real-world assets the new gold?
It is notable to note that Chainlink’s involvement with RWAs did not start in 2023. However, the increase in adoption this year has been enormous. But the project did not do it alone.
Like Avalanche [AVAX] and internet computer [ICP] also contributed to the increase. That is also one of the reasons for the market capitalization of the RWAs category has grown to $33.22 billion, according to CoinMarketCap.
Interestingly, AVAX and ICP, in addition to LINK, have been tipped by analysts like Scott Melker as some altcoins “destined” to benefit from the story in 2024.
SHALL $LINK TO BE THE BIGGEST BENEFICIARY OF THE TOKENIZATION OF REAL WORLD ASSETS (RWA)?
K33 Research suggests that Chainlink’s native token, LINK, is the “safest bet” for investors looking to capitalize on the growing trend of real-world asset (RWA) tokenization. Tokenization… pic.twitter.com/Xrfv4trxD6
— The Wolf of All Streets (@scottmelker) October 11, 2023
As a result of this development, Chainlink’s social dominance has improved. AMBCrypto’s review of Santiment’s data showed that social dominance peaked on several occasions.
Social dominance measures the level of discussion about a project compared to other projects on the market. At the time of writing, LINK’s social dominance was still in place increased up to 0.906%.
The walk is a testament to the attention Chainlink has received for most of the year.
Per price action, LINK’s value has increased by 171.66% over the past 365 days. So, investors who bought LINK when the year started would have made more gains than those who bought Bitcoin [BTC].
Source: Santiment
LINK plans to double its value
At the time of writing, LINK’s price was $15.47. This value represented a decrease of 2.26% compared to the 24-hour price when this article was written.
Despite the decline, there are predictions from some analysts that LINK’s price could double within a few months.
The most notable analyst to have “shilled” LINK is Michaël van de Poppe. Van de Poppe has been talking about LINK since the price was under $8.
On December 18, Van de Poppe, also the founder of MN Trading, posted that the cryptocurrency could reach $25 in the next three to six months.
In the post, he opined that the $14 region was just a consolidation phase for the token. It could therefore also be a good entry point for market participants who want to hold their shares for the medium term.
#Chain link consolidates at $14, and doesn’t even come close to retesting at $8.
Most likely, anything in the range of $11-14 is a good starting point, with a target of $25 in the next 3-6 months.
The upward cycle has begun and consolidation periods are entry points. pic.twitter.com/2iKEFOfX45
— Michaël van de Poppe (@CryptoMichNL) December 18, 2023
According to the price forecast, Chainlink investors can focus on one area: the correction with Bitcoin. According to Macro axisLINK has had a correlation coefficient of 0.94 with BTC over the past 90 days. The correlation coefficient is a value ranging from -1 to +1.
Values close to zero imply that Bitcoin does not influence LINK’s price. On the other hand, reading almost 1 suggests otherwise.
Although LINK is about 1.37 times more volatile than BTC, players who own both cryptocurrencies tend to make profits on each around the same time period.
Weak hands, but HODLing is an option
Going forward, it may be important to monitor Bitcoin’s movement when considering LINK. However, this is not to say that there are not times when the altcoin breaks away from the number one cryptocurrency.
Therefore, traders may want to pay attention as a number of similar situations occurred in 2023. At press time, the H4 chart showed that the 20 EMA (blue) had reversed the 50 EMA (yellow). This is considered a bullish signal.
Thus, LINK may experience a prolonged uptrend in the coming weeks, and this potential increase could begin in January 2024. On the other hand, LINK may not test the previous peak for a few days.
This was due to the Relative Strength Index (RSI). At the time of writing, the RSI reading dropped to 52.24, indicating that buying momentum had become weak. If LINK fails to achieve high momentum, the price could fall below $15.
Source: TradingView
However, if the Awesome Oscillator (AO) manages to rise above 0.025, LINK’s momentum and direction could change for the better. This change, if it were to happen, could be the first step for the cryptocurrency to move toward $25.
Again, watch out for whales and others
Moreover, it is important to note that technical analysis is not the only key that can influence Chainlink’s price action. Establishing itself as the standard for tokenized assets on the blockchain would also play a key role.
This RWA story also influenced the adoption of LINK. At several points, AMBCrypto reported how whales were collecting the cryptocurrency in large numbers.
While it was uncertain which whales were involved, it was speculated that some traditional institutions that adopted the Chainlink protocol were involved.
Should the accumulation continue into 2024, LINK can once again replicate the performance it has had throughout the year. For the time being, other aspects have also placed Chainlink as a relevant crypto project.
Read the one from Chainlink [LINK] Price forecast 2024-2025
Some of these include the Cross Chain Interoperability Protocol (CCIP) and the Proof of Reserves. The Proof of Reserves encourages transparency by allowing assets to cryptographically confirm reserves through the Oracle decentralized network.
On the other hand, the CCIP allows data and token transfer between chains. While both concepts seem important to the crypto ecosystem as a whole, only time will tell whether this will help Chainlink gain traction.