It’s been a tough past few days for altcoins, such as Chainlink (LINK). The price of Chainlink, the leading altcoin which is based on Ethereum, has fallen 3.1% in the past 24 hours alone, according to CoinGecko market data.
To put that into context, Bitcoin has rallied in excess of 4% over that same time period.
Stepping back, LINK’s price action is even more surprising. CoinGecko data shows that the coin has dropped around 10% in the past week alone. Simultaneously, Bitcoin gained in excess of 7%.
Chainlink poised to fall against Bitcoin
Analysts assume that Chainlink (LINK) is poised to underperform BTC in the days and weeks ahead. This comes after the altcoin rallied really higher against Bitcoin over recent months due to it acting as somewhat of a bellwether for the DeFi market, leading the market up and down.
One crypto-asset trader recently shared a chart which shows that the leading altcoin is forming some bearish signals as it trades below two crucial moving average that held as support during the summer rally. The coin is also forming a pennant/triangle pattern that seems poised to break to the downside.
The trader that shared the chart expects a move lower of 25-30% in the price of Chainlink against BTC.
This may not necessarily mean that Chainlink drops against the U.S. dollar, just that it falls relative to BTC’s valuation. Su Zhu, CIO and CEO of crypto and foreign exchange trading fund Three Arrows Capital, recently said: “$BTC going up swiftly is not only not bullish for alts but it’s bearish. reasons for this are myriad but boil down to the fact that money is a coordination game and Bitcoin is the Schelling point; this is independent of how you feel about it, community is literally irrelevant.”
He added in a later comment that he believes that capital from altcoins may stay mostly in Bitcoin until the coin distributes in the $40,000 to $70,000 region in the future.