The cryptocurrency altcoin known as Chainlink has had a banner year, bringing investors in the project gains of over 1,100% from trough to peak.
However, a violent selloff has begun in the asset, with investors taking profit following incredible returns it amassed throughout the year. The price action closely mimics a Wyckoff distribution schematic that suggests the selling will continue in the foreseeable future.
A Look Back At The Altcoin’s Year of Strong Performance
Ever since the crypto hype bubble popped, stories of crypto investors becoming rich overnight have all but dried up and have become little more than myths or fairytales harkening back to the days where irrational exuberance took control over the mainstream public.
But every now and again, an altcoin will come along that disrupts the industry and shocks the crypto community with massive gains. This year’s poster child for crypto moonshot is none other than Chainlink.
Related Reading | Ripple and Stellar Lead List of Worst Performing Altcoin Assets Year To Date
Starting off the year, talk of Google utilizing the altcoin got the world buzzing and the price skyrocketing.
Chainlink began 2019 at a price of roughly 29 cents per LINK token, and shortly after ballooned to $3.70 each. As is the case with any parabolic rally, the asset had a deep correction, but later found support and rallied once again.
After setting a third and final top, the crypto asset has been on a steady descent, and according to a comparison with the Chainlink price chart and a Wyckoff distribution schematic, the selling may only just be starting.
#chainlink #Wyckoff pic.twitter.com/yfXBQliLpg
— Moe (@Moe_mentum_) December 3, 2019
Wyckoff Theory Suggests Chainlink Distribution Has Only Just Started
According to Wyckoff theory, created by iconic analyst Richard Wyckoff, financial assets go through four distinct price action phases: accumulation, mark up, distribution, and mark down.
The accumulation phase would have occurred while Chainlink was at low prices near its bottom at the start of the year, and the mark up phase would have followed, taking the price of the asset to its all-time high.
But once it got there, profit-taking turned the tides, the trend reversed, and a selloff is now underway. If distribution is now in full effect, Chainlink’s price should continue to drop for the foreseeable future in a mark down phase.
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And with investors with so much room overhead for the asset to drop and still sell at a profit, the distribution could go on for a long time, until the asset’s price becomes attractive enough for altcoin investors to begin to re-accumulate once again.
Chainlink is currently trading at $2.09 cents, according to CoinMarketCap, down from its all-time high of $3.70 at its peak.
Featured image from Shutterstock
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