- Chainlink price has been in a strong bearish trend in the past few days.
- The network introduced the concept of staking as part of Chainlink 2.0.
Chainlink price retreated to the lowest level since November 28 even after the network soft-launched its staking rewards feature. LINK plunged to a low of $6.767, which was about 12% below its highest level in November.
LINK staking goes live
LINK price tilted downwards even as Chainlink went through its most important change since launch. It evolved from being a centralized oracle network into a decentralized one. This upgrade is part of the much-touted Chainlink 2.0.
The network launched stalking on Ethereum’s network for a small group of people. This beta version will go on for a while and then it will be launched for all people. Eligible token holders can deposit a maximum of 7,000 LINK for now.
According to the staking dashboard, LINK holders have already filled more than 10 million LINK tokens. Only 12.5 million LINK additional LINK tokens can be staked. The early access period for this phase of staking will end on Thursday. The token now has a community staker reward rate of 4.75%.
Staking rewards in LINK will come from the economic benefits offered by the network. For example, by staking their coins, stakers will earn rewards for helping secure the Data Feed.
Read more about how to buy Chainlink.
There are three main reasons why Chainlink price dropped after the lauch of staking in the ecosystem. First, the decline is in line with the performance of other cryptocurrencies. Bitcoin has pulled back to about $16,857 while the combined market cap of all cryptocurrencies dropped to $839 billion.
Second, LINK price dropped because the launch of staking was already priced in. The news about the upgrade came out a few months ago. Therefore, it dropped because of a phenomenon known as buying the rumour and selling the fact.
Finally, as mentioned, this staking has not been opened to everyone. Eligible holders are those who held over 7 LINK on Ethereum for at least 50% of the time between May 30, 2019 and June 7, 2022. The other category are those who held more than 7 LINK for at least 90% of the time between August 2021 and June 7 this year.
Chainlink price forecast
The four-hour chart shows that LINK price has been in a strong bearish trend in the past few days. It has declined from the 50% Fibonacci Retracement level. At the same time, the 25-day and 50-day moving averages made a bearish crossover pattern while the Relative Strength Index (RSI) moved to the oversold level.
Therefore, with the coin forming a rounded top pattern, Chainlink price will likely continue falling as sells target the key support at $6.4. A move above the resistance level at $7 will invalidate the bearish view.
