Recently, the virtual asset market has been experiencing a continued cycle of pumping centered on altcoins. Various assets such as Polkadot, Chainlink, ADA, Waves, Engine, Ignis, EOST, Moss, and Hedera have shown rising trends in succession, but the movements are so irregular and rapid that it is not easy to make actual profits. In particular, Engine Coin has seen fluctuations from 0% to 100% in a single day, and investors who entered at the peak are likely facing difficulties in recovery in a short period. As such, trading that follows short-term spikes is prone to losses, so it is an approach that should consistently be avoided.
At this point, it may be a better strategy to wait for the coins I hold to pump, or rather to enter coins that have not yet risen at lower points and wait. Alternatively, if short-term trading is difficult or responding to complex market flows is challenging, a strategy of gradually buying major coins like Bitcoin or Ethereum during adjustments and holding them long-term may be the most realistic choice. This is a valid approach for investors who view the current market as an upward trend.
Bitcoin itself is also showing an upward trend by raising the low in the recent 4-hour candles, and in the weekly candle, it forms lower wicks even in down candles, raising expectations for upward closing flows. Of course, there is a perspective that sees a head and shoulders formation, but from a probabilistic standpoint, it is not a bad choice to lean towards the upside and take positions. If this continues, we can expect a retest of $40,000 and an attempt to renew the previous peak.
Amid such market conditions, the coin that is particularly gaining attention is Chainlink, the leader in the DeFi sector. Chainlink started in 2017 and has continued to grow steadily since launching its mainnet in May 2019, ranking first in market capitalization in the DeFi sector. It has established a solid position with more than double the market cap difference compared to the second coin and is highly regarded, ranking 9th in the entire cryptocurrency market.
Chainlink serves as an oracle function that connects external data to Ethereum smart contracts, providing various information such as external price data, sports results, and weather data in a secure and reliable manner on the blockchain. This is evaluated as a significant strength, as it can enhance data reliability not only in the financial services sector but also in all decentralized applications.
Chainlink is listed on major global exchanges centered around Binance and is actively traded on domestic exchanges like Upbit and Bithumb. Partnerships are also continuously expanding, supplying oracle solutions in collaboration with various blockchain projects.
In terms of prices, there was a correction after the peak in August 2020, but it is currently maintaining an upward trend by renewing its peak again in January 2021. Particularly, if Bitcoin's stable flow continues, DeFi leaders like Chainlink among altcoins are likely to receive attention once again. However, considering that the current position has risen significantly, it is a favorable strategy to take a gradual approach during adjustments rather than making rash entries.
These days, the market shows a distinctly different atmosphere compared to the bull market of 2017-2018. The variety of altcoins has greatly increased, and the speed of decline after a pump has also become faster. As a result, the market is more sensitive and volatile, requiring investors to make more cautious judgments and strategic approaches. Rather than trading for short-term profits like a moth to a flame, investments should be made through structural trends and well-founded analyses of the assets.
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