11 JAN 2022 (TUE)- ChainLink (LINK) Report Card

11 JAN 2022 (TUE)- ChainLink (LINK) Report Card

By quantdoge | Daily Crypto Risk Report | 11 Jan 2022


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.
  • I do hold a long position in LINK as a token holder.

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

2. How ChainLink Performs Relative to Other Cryptos ?

Performance of All Cryptos Under Quantdoge Watchlist in 2021 (Sorted by % Return)

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LINK has undergone 145.08% return from USD 11.2532 to USD 27.579 since 01 Jan 2021. LINK is the 24th best performing crypto assets among others here.

3. How Resilience ChainLink Is Towards Bitcoin Crash Relative to Other Cryptos ?

Historically, all altcoins are somewhat dependent on Bitcoin price movement and it’s often the case where if Bitcoin falls, most altcoins would follow.

Top 3 Cryptos That Are Most Resilient To Bitcoin Crash During Each of BTC 4 Largest Crashes in 2021

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LINK has proven resilience against BTC crash in 0 out of the 4 instances.

During the last 4 BTC market crashes,
When BTC dropped by -13.47 %, LINK returned -35.65 % at 20 May 2021,
When BTC dropped by -13.13 %, LINK returned -15.66 % at 22 January 2021,
When BTC dropped by -12.16 %, LINK returned -13.68 % at 13 May 2021,
When BTC dropped by -11.39 %, LINK returned -19.5 % at 22 June 2021
           
4. Technical Analysis on ChainLink

4.1. 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 10 Jan 2022, VWAP is suggesting that LINK is gaining a lot of momentum and is now trading above its volume-weighted average.

4.2. 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 10 Jan 2022, MACD is suggesting that LINK is gaining a lot of momentum and is now trading above its volume-weighted average.

4.3. 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 10 Jan 2022, Bollinger Band is suggesting that LINK is being overbought to the upper band, likely overvalued in the short run.

4.4. 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 10 Jan 2022, RSI is suggesting that LINK is being overbought to the extent where its RSI has exceeded the standard upper threshold of 70, likely overvalued in the short run.

4.5. Price and Volume Analysis

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Despite the broad crypto market sell-off, whales have been aggressively buying up LINK as its price increases.

Based on the technical analysis presented above, quantdoge holds the opinion that there is a fair chance for LINK to retrace to a lower price level in the near term, but I could be wrong, hence please make your careful due diligence before making any financial decision.

5. 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 10 Jan 2022 as compared to 10 days before on 31 Dec 2021, with its biggest pullback being seen at -14.05% 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.

6. 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 is trading above the upper 75th percentile of all quantdoge simulations, indicating that LINK is overbought and relatively overvalued. 

7. 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 1691.0 % from 39,618 to 709,557 on Twitter and grown 518.38 % from 12,141 to 75,077 on Reddit.

Number of LINK Followers In The Last 30 Days

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In the last 30 days alone, ChainLink followers have grown 7.55 % from 659,735 to 709,557 on Twitter and grown 2.43 % from 73,294 to 75,077 on Reddit.

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Daily increment of ChainLink Twitter followers peaked on 05 Jan 2022 and its daily increment of Reddit followers peaked on 05 Jan 2022. On average, ChainLink's number of Twitter followers have been increasing by 1,773 per day and its number of Reddit subscribers have been rising by 61 per day. 

8. Google Trends Analytics

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chainlink reached its peak in Google Search on 2021-05-02  with a Google Score of 76
Over the last quarter, chainlink Google Score has increased 37.63 % from 23.25 to 32.0
Over the last 6 months, chainlink Google Score has increased 24.03 % from 25.8 to 32.0

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Over the last month, chainlink is most saught after on Google from Albania, followed by Estonia and Kosovo.

9. Developer Activity Analytics

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Fork

Fork refers to the amount of time where the Github repo of current cryptocurrency is being copied. Higher fork number could mean that this cryptocurrency project is getting more interest in the developers community who likes to explore more on the deep technical of this project.

ChainLink forks increased 101.75% from 400 to 807 in the past year.

Star

Star refers to the number of developers who bookmark the Github repo of current cryptocurrency. Higher star number could mean that this cryptocurrency project is getting more general interest in the developers community.

ChainLink stars increased 92.81% from 1,446 to 2,788 in the past year.

Pull Request

Pull request contributor refers to developer who has made a successful improvements/ modifications on the Github repo of this current cryptocurrency project. Higher number of pull request contributors could mean that there is a high number of commitment given by developers to this cryptocurrency project.

However, a low number also could mean that the developer community of this project applies a strict standard when it comes to code review, so only developers who have published a high quality code with highly impactful features got approved.

ChainLink pull request contributors increased 54.39% from 57 to 88 in the past year.

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

Follow My Twitter for daily updates: https://twitter.com/quantdoge 

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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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