Number of factors caused collapse of LINK from local high
Chainlink showing solid price performance The value of its underlying token soared from $6 to $9 over the past few months, giving its holders a 40% profit. However, the rule of buy the rumor and sell the news has never been more accurate.
In around two weeks after reaching the local high, LINK saw a massive spike in selling orders, with the majority of short-term traders dropping their holdings ahead of the implementation of Chainlink staking. But there are additional reasons behind the sudden plunge in LINK’s value.
Volume / Price Divergence
Trading volume is more than just a representation of the number of traders and orders on the market. Volume profiles represent market depth, liquidity, and sometimes volatility.
There are also certain volume patterns that persist during a certain price performance periods. In the case of Link, the divergence between the positive price performance and the existing volume showed that the witnessed rally has been gradually losing power and the reversal was just a matter of time.
problem with staking
Prior to the release of the first version of the trial into beta mode, some users were discouraged after hearing the new timelines. Earlier, version 1.0 of staking was expected after 12-24 months of 2022.
According to the announcement, the main version of staking might not occur in the previously announced timeframe, which raises questions about the ability or inability of developers to deliver the long-awaited products that would drastically increase the fundamental value of Chainlink.
At press time, LINK is moving in a local downtrend, and according to various on-chain and market indicators, this trend will continue until the coin reaches the local support level at $5.
