Decentralized oracle network Chainlink’s LINK token and other prominent alternative cryptocurrencies (dubbed altcoins) are charting solid gains as the crypto market leader bitcoin takes a bull breather.
LINK set a new record price of $23.68 overnight and is changing hands near $21.73 at press time, a 7.3% gain on a 24-hour basis. The previous lifetime high of $19.90 was reached in August, according to CoinDesk 20 data.
The cryptocurrency has nearly doubled in the first two weeks of the year in a strong follow-through to last year’s 530% rise. Chainlink’s oracles act as a bridge between cryptocurrency smart contracts and off-chain data feeds.
Some altcoins such as OMG and OXT are up over 10% in the past 24 hours, while others including ether, litecoin, bitcoin cash have gained at least 2–8% each.
Bitcoin is currently trading near $36,900, representing a 5% gain in 24 hours, but remains trapped in a week-long tightening range of $30,000 to $40,000. The period of consolidation looks to be paving the way for the rotation of money into the relatively cheap altcoins.
The switch to alts began last week with Polkadot blockchain’s DOT token rallying sharply to become the fourth-largest cryptocurrency by market capitalization, according to Alex Melikhov, CEO and founder of cryptocurrency framework Equilibrium and the EOSDT stablecoin. “Other coins now seem to be following Polkadot higher,” he said.
The record ether-bitcoin implied volatility spread seen earlier this month had suggested a rally in ether and alternative cryptocurrencies in general may be on the way.
Altcoins could continue to “pop hard” while bitcoin is held in a narrowing price range, said market analyst Lark Davis on Twitter.
LINK may receive an additional boost from an impending switch to proof-of-stake (PoS) this year. Staking refers to the process of pledging coins for a period to support the operations on a blockchain network in return for rewards. In layman’s terms, it is similar to earning interest on a fixed-income investment like bonds.
The altcoin rally may pause if bitcoin’s recent narrowing price range ends with a bullish breakout, opening doors for stronger gains. “If bitcoin breaks $42,000, it’s going to run to test $50,000 pretty quickly,” Vinny Lingham, investor and founder of crypto wallet and identity verification firm Civic, tweeted Thursday.