Looking at crypto twitter the last few days, you have probably seen traders and crypto enthusiasts tweeting about LINK and other "altcoins." The term Altcoin Season itself has also come up more the last few weeks.
So in today’s blog, we take a quick dive into recent LINK price swings and also cover these references to Altcoin Season.
What is LINK?
Earlier this week, crypto twitter was buzzing about LINK so first, what is it exactly? LINK is the native token of the decentralized data oracle network Chainlink. It aims to serve as middleware between smart contracts on smart contracting platforms and external data sources, allowing smart contracts to securely access off-chain data feeds.
In 24 hours, its price surged from $6.10 to an All Time High of $8.26, representing a rough 35% jump. At the time of the writing, $LINK just hit another ATH and is trading above the $8.40 line.
This 24 hour rally was slowly kick-started on the 6th of July, when LINK was trading around $4.75.
How this rally was different from the recent DOGE pump-and-dump? On one hand, DOGE is famous to be a “joke” coin and its recent price surge was linked to a viral video on the social media platform TikTok. On the other hand, LINK's price surge comes after a series of important integrations for Chainlink.
First, on June 26th, China’s national Blockchain Services Network announced it will be using Chainlink oracle functionality to help run its network. More recently, on July 8th, the Switzerland based crypto lending platform, Nexo, announced its partnership with Chainlink. The oracle provider will publish audit trails for Nexo’s lending and borrowing operations.
This rally then led to further speculation of being the catalyst for a coming Altcoin Season.
What is "Altcoin Season?"
Most simply, Altcoins are all the cryptocurrencies that are not Bitcoin. Since its inception more than a decade ago, BTC has been dominating the markets in trading volume and market capitalization. Meanwhile, when Bitcoin dominance decreases significantly, it can be the signal of an “Altcoin Season” -- a period in which many alternative crypto assets are gaining value regardless of the price movement of Bitcoin, decreasing BTC’s market dominance.
Even though experts still do not agree on the existence of any Altcoin Season, one importnant step is to distinguish it from a another crypto term - pump-and-dump.
As the name refers, traders cordinate efforts to artificially inflates the price of an owned coin in order to sell it at the highest price, there by bringing the price back down.
However during Altcoin Season, several alternative crypto assets gain value over a longer period of time, generating an increase in Altcoins' market share.
So is it the beginning of a new Altcoin Season?
It is impossible say just yet. The current BTC Dominance Index is above 63%, far from the 38% at the peak of the 2017 Altcoin Season. Traders may also be looking at alternative coin opportunities if the current sideways trend of Bitcoin continues much longer. With Link, and many others seening price drop between 5 and 10% at the end of this writing, I supposed we'll have to wait and see.
Disclaimer: contents of this article are for general market education and commentary and are not intended to serve as financial, investment, or any other type of advice.
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