- Chainlink's LINK jumped as the volume of short liquidations rose on Friday.
- Chainlink secured a deal with TrueUSD, a fast-growing stablecoin.
Chainlink price darted higher on Thursday as the volume of short liquidations in the market rose. LINK, the blockchain’s token, jumped to an intraday high of $8.13, the highest level since Tuesday this week. In all, the coin has jumped by more than 47% from the lowest level this year.
LINK short liquidations rise
One way of explaining the performance of cryptocurrencies is to consider the volume of short liquidations in the market. For starters, shorts are traders who have placed bets that a financial asset will drop in a certain period. They benefit when this thesis turns accurate.
Therefore, in most periods, cryptocurrency prices tend to do well when short liquidations are rising. The view is that some of these short-sellers are slowly turning bullish. Also, there is usually the view that selling pressure diminishes when there are limited short-sellers.
Data compiled by CoinGlass shows that the volume of short liquidations rose on Friday. Short-sellers liquidated coins worth about $553k on Friday while longs liquidated $223k worth of coins. CoinGlass usually tracks data from leading exchanges like Binance, OKX, Bybit, and Huobi.
However, as shown below, the volume of long liquidations in February has been more than shorts. This partly explains why LINK has struggled quite a bit this month.
A likely reason why short liquidations rose on Friday is the news we broker earlier today, Chainlink secured a major win after TrueUSD selected its proof-of-reserve services. This is a major development since TUSD is a fast-growing stablecoin with a total market cap of over $967 million.
Chainlink launched its proof-of-reserves service in 2022 as demand for those services was rising following the collapse of Terra Luna and FTX.
Chainlink price prediction
On the 1D chart, we see that the LINK crypto price has been in a slow bullish trend in the past few days. It was trading at $7.82, which was the highest point on December 1. It is actually hovering at this point as a sense of indecision lingers in the market. Chainlink has moved above the 50-day moving average while the Relative Strength Index (RSI) has moved below the overbought level.
Therefore, there is a likelihood that Chainlink will continue rising in the coming days. If this happens, the next level to watch will be at $9.50, the highest point on November 8. This price is about 20% above the current level.
