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Chainlink was among the crypto assets which suffered losses during the recent crypto fall. Chainlink became attractive for the whales seeing this steep fall resulting in some monthly gains.
Last updated Sep 21, 2022 at 1:25 AM
Posted Sep 21, 2022 at 4:00 PM
We will explore how and why Chainlink became attractive for the whales during this bearish cycle of the crypto market. But to begin with, we will look at what purpose chainlink serves in the crypto market along with its current market condition.
What’s the Purpose of Chainlink in the Crypto Market?
Globally interconnected smart contracts are possible thanks to Chainlink, a blockchain abstraction layer that was launched in 2017. A decentralized oracle known as Chainlink empowers blockchains to securely interact with external databases, events, and payment methods while providing the essential off-chain data needed by sophisticated smart contracts, which are quickly replacing traditional digital contracts as the most common type of contract in the world.
The Chainlink Network leverages a huge number of open-source communities of data providers, node controllers, smart contract developers, researchers, security auditors, and other individuals. The company is dedicated to guaranteeing decentralized participation for all node operators and users that wish to contribute to the network.
Let’s delve into the recent market condition of Chainlink’s ecosystem.
What’s Happening in the Chainlink Ecosystem?
The 23rd-ranked crypto asset is exchanging hands above the $7.10 price mark per unit with losses of more than 1% over the last 24 hours. Statistics from CoinMarketCap show that the asset has lost more than 33% of its daily trading volume. In May 2021, the asset reached its all-time high of $52.8 price mark. Now, the price has tanked more than 85% over the course of a year. The post-Merge bearish cycle of the crypto market resulted in losses for several assets including Chainlink. For some reason, this change got the attention of the crypto whales who saw an opportunity to buy the dip.
Let’s look at the fundamental side to guess how things will turn out for Chainlink.
On Chainlink [LINK], current whale activities have proven to be a blessing in disguise. Prices for LINK tokens plummeted last week after a significant sell-off in the cryptocurrency markets. Crypto whales, on the other hand, were drawn to the declining prices and have since begun to buy the dip. In the past, whale behavior was a major factor in attracting attention to any token.
Santiment, a blockchain data company, reported that in just four months, LINK whales increased the amount of supply they possessed by more than 3%. Furthermore, the fraction of LINK tokens held by addresses with 10k to 1 million tokens has now reached its peak in precisely three years.
The well-known "feeds" protocol from Chainlink is starting to gain popularity among cryptocurrency users. Thales, a platform for positional trading, recently disclosed its expansion to Arbitrum, an Ethereum L2 solution. They will use "highly popular" feeds tokens on Arbitrum that, most significantly, are supported by Chainlink.
On September 20, the LINK token experienced some relief, much like the rest of the cryptocurrency market. After a late 2.5% increase on September 20, LINK was trading above $7.10 at the time of publication. Due to this, LINK's weekly losses have been reduced to slightly under 6%. Further responding to this bullish action, the Market Value Realized Value (MVRV) Ratio was back in the green at the time of publication. LINK's MVRV was negative for the majority of the previous six months. However, as traders started to amass more gains through LINK trading, this measure started to show some improvement more recently.
ChainLink is on the brink of seeing another accumulation period in the next few days. At the time of publication, 50/100 EMA are about to cross their horns once again. Whales are in control, so expect price volatility on both sides. In the 4H chart, indicators show that the price of the asset might accumulate around major support of about $6.98.
When whales are interested in any asset, expect the unexpected. Indeed, the $9 price mark is also possible if the market remains stable in the coming couple of days.
Social sentiments about Chainlink are improving after falling for the past couple of years. This improvement can be the reason for whales' interest in the asset. Not financial advice!!!