09 NOV 2021 (TUE)- Chainlink (LINK) Daily Risk Report

09 NOV 2021 (TUE)- Chainlink (LINK) Daily Risk Report


Investment Disclaimer:

  • I am not a registered investment, legal, or tax adviser or a broker/dealer, and all opinions expressed by me are from my research for educational purposes only.
  • Past performance presented here is not an indicator of future performance.
  • This post expresses my own opinion about the cryptocurrency mentioned herein and is not an offer to buy or sell, or a solicitation of any offer to buy or sell the cryptocurrency mentioned in this post.

1A. Top 3 Good News for LINK HODLERS !!!

1B. Top Bad News for LINK HODLERS !!!

2. How Chainlink Performs Relative to Other Cryptos ?

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As of 08 Nov 2021, Chainlink has made a cumulative return of 1940.75% since Jan 2020 and 295.49%  since Jan 2021. It is currently the 11th greatest performing crypto asset since Jan 2021 as compared to the other cryptocurrencies presented above.

3. Technical Analysis on Chainlink

3.1. Volume Weighted Average Price (VWAP)

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VWAP is a technical indicator used by a trader to gauge the overall trend of an asset price movement. VWAP line (orange line) represents the volume-weighted average price (average price here is defined as the average of high, low and close prices) while close price line (blue line) represents the price when LINK is closed at the end of every single day. 

Whenever blue line (close price) is above orange line (VWAP), it indicates that the asset is gaining momentum and being traded higher than its average price level. This would represent a 'buy' opportunity for short-term momentum trader whom task is to trade following the trend while a longer term mean-revision trader might take it as a 'sell' opportunity, anticipating that the price of LINK (blue line) to fall to its average level (orange line).

Whenever blue line (close price) is below orange line (VWAP), it indicates that the asset is losing momentum and being traded lower than its average price level. This would represent a 'sell' opportunity for short-term momentum trader whom task is to trade following the trend while a longer term mean-revision trader might take it as a 'buy' opportunity, anticipating that the price of LINK (blue line) to rise to its average level (orange line).

As of 08 Nov 2021, VWAP is suggesting that LINK is gaining significant momentum.

3.2. Moving Average Convergence Divergence (MACD)

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MACD is often used by trader as a momentum indicator. There are 2 lines that form the above charts, namely MACD (12, 26) lines and Signal(9) line, while the histogram is calculated by subtracting Signal (9) from MACD (12,26). Histogram would fall to the negative territory whenever MACD (12, 26) is trending at a lower level than Signal (9) and rise to the positive territory whenever MACD (12,26) is trending at a higher level than Signal (9).

MACD (12, 26) is computed by subtracting the 26-day exponential moving average (EMA) of LINK closing price from its 12-day EMA. 
Signal (9) on the other hand is calculated as the 9-day EMA of MACD (12,26). 

As MACD (12, 26) goes higher away from Signal (9), it signifies that LINK is gaining momentum and whenever it goes trends at a lower level than Signal (9),it signifies that LINK is losing momentum. 

As of 08 Nov 2021, MACD is suggesting that LINK is gaining significant momentum.

3.3. Bollinger Band

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Bollinger band is often being used by mean-reversion trader as a gauge to assess how undervalued or overvalued an asset is. Its chart made up of 4 lines, namely:

- SMA (20) (blue line), which is the 20-day simple moving average price of LINK
- Upper Band (orange line), which is computed by adding 2 standard deviations of LINK on SMA (20)
- Lower Band (red line) , which is computed by subtracting 2 standard deviations of LINK from SMA (20)
- Close (green line), which is the daily closing price of LINK

Whenever close line (green) touches the lower band (red), it indicates that LINK is corrected too much and is being traded at an undervalued level, representing a 'buy' opportunity. On the other hand, whenever close line (green) touches the upper band (orange), it indicates that LINK is gaining too much momentum and is being traded at an overvalued level, thus indicating a 'sell' opportunity. 

As of 08 Nov 2021, Bollinger Band is suggesting that LINK is trading at an overbought region.

3.4. Relative Strength Index (RSI)

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Just like Bollinger Band, Relative Strength Index is often being used by mean-reversion trader as a gauge to assess how undervalued or overvalued an asset is. There are 2 psychological levels, i.e. 30 and 70 in RSI. Whenever the RSI reaches 30, it indicates that LINK is corrected too much and is being traded at an undervalued level, representing a 'buy' opportunity. On the other hand, whenever RSI reaches 70, it indicates that LINK is gaining too much momentum and is being traded at an overvalued level, thus indicating a 'sell' opportunity. 

As of 08 Nov 2021, RSI is suggesting that LINK is trading near the oversold region.

Based on the technical analysis presented above, quantdoge holds a slight bullish stance on the near-term price action of LINK, but I could be wrong, hence please make your careful due diligence before making any financial decision. 

4. Chainlink Risk Profile

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Based on the 100-day 95% historical Value-at-Risk (VaR) profile of Chainlink defined above, LINK seems to trade at a similar risk level on 08 Nov 2021 as compared to 10 days before on 29 Oct 2021, with its biggest pullback being seen at -21.29% on a single day during the last 100 days. However, I could be wrong, hence please make your careful due diligence before making any financial decision.

5. Price Simulation for Chainlink

How did quantdoge simulation perform vs the actual LINK price movement over the last week ?

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Over the last 7 days, LINK has been trading above the median of quantdoge simulations, indicating that LINK was neither overbought nor oversold.

 6. LINK Community Analytics

Number of LINK Followers In The Past 24 Months

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During the past 24 months, Chainlink followers have grown 1495.91 % from 37,075 to 591,682 on Twitter and grown 515.98 % from 11,525 to 70,992 on Reddit.

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Monthly increment of Chainlink Twitter followers peaked on Nov 2021 and its monthly increment of Reddit followers peaked on Feb 2021.

Number of LINK Followers In The Last 30 Days

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In the last 30 days alone, Chainlink followers have grown 11.73 % from 529,569.0 to 591,682.0 on Twitter and grown 3.67 % from 68,479 to 70,992 on Reddit.

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Daily increment of Chainlink Twitter followers peaked on 04 Nov 2021 and its daily increment of Reddit followers peaked on 05 Nov 2021.

If you like my analysis and articles, please follow me at @quantdoge for daily updates.

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quantdoge
quantdoge

Data scientist in crypto and blockchain space.


Daily Crypto Risk Report
Daily Crypto Risk Report

This blog was created by quantdoge, a data scientist in the cryptocurrency and blockchain space to publish daily risk reports on different cryptocurrencies. All published reports in this blog were analyzed with in-house algorithmic trading and quantitative risk management technology. ** Investment disclaimer: ** I am not a registered investment, legal, or tax adviser or a broker/dealer, and all opinions expressed by me are from my research for educational purposes only.

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