The Chainlink price has had a somewhat mediocre performance over the past few months. Once a cryptocurrency that was within the top 10 by market capitalization, LINK has currently slipped to 22nd place. However, within the next few months, Chainlink could be poised to outperform other cryptocurrencies.
In addition to the fundamentals, LINK’s weekly chart shows an extremely bullish occurrence. The chart reveals that the LINK price has formed a bullish divergence with the RSI on a weekly basis. The bullish divergence is shown by the fact that the price has recently fallen to new local lows, while the RSI is not making a new low.
This shows that the bears are losing power and that the LINK bulls are ready to control the market again. Ultimately, the bullish divergence could signal the end of the prolonged downtrend.
However, in the short term, there could be another drawdown for LINK. The 4-hour chart is showing a bearish divergence as the price is making new local highs while RSI is trending down, making new lower lows.
Although the market is taking a bullish stance on Chainlink, the discrepancy means that momentum is slowing.
Chainlink Relies On Strong Fundamentals In 2023
A bullish catalyst in 2023 might become Chainlink’s low-latency pull-based oracles. Instead of regularly pushing data to the chain based on predefined conditions, the oracle reports will be made available off-chain and added to the chain by users as they are needed.
This technical improvement was announced by Chainlink in early November. As Chainlink’s community ambassador “ChainLinkGod” wrote on Twitter, this has massive implications for dApp users and developers.
They can use the technology to increase leverage, lower trading fees, and improve the UX. Additionally, the oracle reports can be kept private until transactions are settled on the chain. “Combined with the high-frequency nature of the data, oracle frontrunning can be mitigated,” the ambassador says.
This is a game-changer, especially for decentralized derivatives protocols, which could see a massive influx in 2023 given the antics and collapses of centralized exchanges in 2022, as it makes them more competitive.
The LINK price could benefit from the hype and increased usage, as well as from the partnership with SWIFT. As announced in late September 2022, the Society for Worldwide Interbank Financial Telecommunications (SWIFT) has partnered with Chainlink to connect the global financial ecosystem to almost any blockchain.
The World Economic Forum estimates that up to 10% of global GDP will be stored and transacted via distributed ledger technologies by 2027, and tokenized markets could be worth up to $24 trillion by 2027, according to a new report.
If Chainlink could be a part of this development alongside SWIFT, the LINK bulls can easily take over and push the price upward.
Featured image from Binance Academy, Chart from TradingView.com