Why is Chainlink surging as the crypto market stagnates?
The cryptocurrency market experienced a slight decline of just over 1% on Monday, resulting in losses across various digital assets. Notably, leading cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) have been impacted, losing 3% and 4% of their gains from the previous week, respectively. Most altcoins followed the trend set by the major cryptocurrency, with one notable exception.
In contrast to the anaemic crypto market, Chainlink (LINK) has demonstrated remarkable resilience amidst the prevailing bearish sentiment, managing to maintain an 11% increase in value over the past week.
LINK's recent performance is notable not just for bucking the market trend but also for breaching the $7 price threshold, an achievement that raised questions among analysts about the possibility of LINK riding the current bullish momentum to reach new all-time highs. Link's recent gains represent an impressive recovery of over 21% of its previous month's gains, but it's worth noting that the token still remains 9% below its year high and far below its all-time high of $52, set back in 2021.
At the time of writing, LINK continues to rise. However, to fully recapture its past glory, the bullish momentum behind the token will need to strengthen further. But what could be driving Chainlink's recent success?
What is Chainlink (LINK), and why is LINK's price up?
Chainlink (LINK) serves as both a cryptocurrency and a technological platform for oracles, which are programmes designed to facilitate secure interactions between non-blockchain businesses and blockchain networks. Oracles are essential for mainstreaming blockchain technology by connecting it with more traditional businesses, and Chainlink is one of the most promising projects established in this field. Acting as a middleware layer, Chainlink enables the seamless connection of blockchain-based smart contracts to external data sources, such as sports scores and stock prices.
Notably, Chainlink stands out as one of the pioneering networks capable of integrating off-chain data into smart contracts. At the core of Chainlink's ecosystem is its native ERC-20 token, known as LINK. This token serves as a reward for oracles in its network, which act as decentralised nodes responsible for supplying accurate and trustworthy data to the blockchain network, further enhancing the security and reliability of smart contract operations.
Chainlink's surge in daily active addresses
The upswing in LINK's price coincides with a substantial increase in active unique addresses on the Chainlink network. Data provided by the prominent on-chain analytics firm Santiment reveals that Chainlink's unique addresses have surpassed 3,900 for the first time since 21 July 2023. This surge in addresses reflects heightened network activity and engagement, indicating a growing interest and participation within the Chainlink community.
In the world of cryptocurrency, a rise in unique active addresses often correlates with increased use and adoption of that token, which is evident in LINK's recent market value gains over the past seven days.
Additionally, Chainlink has made significant strides in terms of adoption, with its services integrated across six different blockchain networks, including Arbitrum, Avalanche, Binance Smart Chain, Ethereum, Optimism and Polygon. These integrations underscore the expanding use of the LINK token and increased involvement in the Chainlink ecosystem, further contributing to the ongoing price surge.
Chainlink (LINK) price predictions
At the time of writing, LINK is trading between $7 and $8 and still rising thanks to strong buying pressure after LINK broke past several critical benchmarks: the 200-day moving average ($6.488), the 50-day moving average ($6.706), and the $7.00 resistance level.
With LINK now trading above both the 50-day and 200-day price levels, analysts are pointing to a robust bullish trend that pulls against the wider tide of the crypto market. If the current buying frenzy continues, LINK could potentially reclaim its one-year high of $8.898, achieved on 7 November 2022. There's even potential for LINK to establish a new all-time high in the coming days.
It's worth noting, though, that despite LINK's impressive recovery of over 21% of its previous month's gains during this rally, the token still remains 9% below its 2023 high. To fully recapture this level, the bullish momentum will need to strengthen further.
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