Why is Chainlink (LINK) Price Rising?

KEY TAKEAWAYS

• How Chainlink (LINK) could become a major recovery candidate going forward
• Why LINK’s upcoming staking feature may change the game in the space
• How Chainlink (LINK) might be on the verge of a major rally very soon

WHAT IS CHAINLINK?

Chainlink (LINK) is basically a crypto that incentivises data to be transferred over a blockchain network to smart contracts via ‘oracles’. It basically works as a middleware to provide real world external data to smart contracts running on any blockchain network. Such external data can include anything from baseball scores to stock prices.

It incentivises the process via the native token called LINK and collateralises the network’s smart contract agreements. Enterprises that use Chainlink can access any of the major blockchain networks out there including Ethereum, Solana, and even Terra.

Launched in 2017, Chainlink performs its functions with the help of something called oracles. Oracles are entities that connect blockchains to external systems thereby allowing smart contracts to execute based on inputs and outputs originating from the blockchain network.

Read more: Chainlink will not support Ethereum Forks

MAIN FEATURES OF CHAINLINK (LINK)

There are a few crucial features that the Chainlink blockchain network possesses that make it different from the rest of the cryptos you’d be generally more aware of:

• Supports decentralised data feeds
  With Chainlink, data from many sources can be easily and securely collected and processed for ‘hybrid’ smart contracts.
• Provides verifiable sources of randomness
  Decentralised applications, including blockchain games that require cryptographically secure randomness can use Chainlink to perform that function.
• Enables automation
  Chainlink’s smart contracts can be programmed to automate key functions and event-driven tasks for different kinds of enterprises based on their needs.
• Supports cross-blockchain interoperability
  Chainlink can even work to connect different blockchain platforms to support the exchange of messages, tokens, and specific actions.

ABOUT CHAINLINK STAKING

About two months ago, on 7 June, 2022 – Chainlink had announced the launch of a key new feature on its blockchain platform – staking. This report released by the coin’s developers on 7 June contained the roadmap plan for the staking of Chainlink. It is expected that users will be able to stake the coin for a 5% interest reward, which can be great for topping up investors’ accounts with extra passive income.

Source: Chainlink

The report from Chainlink also outlines its long term goals behind comping up with this plan to implement staking.

The Long-Term Goals of Chainlink Staking

1. Increase the ‘crypto-economic’ security and user assurances of Chainlink services
2. Enable community participation in the Chainlink network
3. Generate sustainable rewards from real long-term use
4. Empower node operators to access higher-value jobs by staking

IN OTHER NEWS:

Other news pertaining to Chainlink include its fantastic week in terms of growing adoptions across the board. In the past week alone, there were 14 integration of 4 Chainlink services across 6 different chains – which include major blockchain networks like Avalanche, Binance Coin, Polygon, Solana, Ethereum and Metis.

⬡ Chainlink Adoption Update ⬡

This week, there were 14 integrations of 4 #Chainlink services across 6 different chains:#Avalanche, #BNBChain, #Ethereum, #Metis, #Polygon, and #Solana.#Chainlink helps power the #Web3 ecosystem. pic.twitter.com/5DW1IiJF3p

— Chainlink (@chainlink) August 7, 2022

CHAINLINK PRICE ANALYSIS

LINK/USD | Source: Tradingview

From a technical standpoint, Chainlink (LINK) crypto has been doing reasonably well. LINK prices have seen a major recovery, coming up just shy of the 60% from its recent lows. LINK had managed to see some recovery when the Chainlink staking program was announced but fell right after, succumbing to broader market pressures.

However, since the second week of July, Chainlink prices have been gaining ground very strongly and has even managed to form a bullish pattern on the charts. Marked by the black trendline, it signifies the formation of a higher highs and higher lows price action from the middle of July which has sustained its bullish strength.

Especially so in the past week, when LINK price have managed to scale over 17%! As of now the Relative Strength Index for LINK is on the higher side, currently at about 68. If the rally continued for another day or two, RSI may breach into the overbought category of the 75-80 range which could bring about a small correction in prices. However, that is but natural in any bullish trend will have some brief periods of correction only to be followed by renewed recovery.

METRICS SEEM TO SUGGEST ATTRACTIVE VALUATIONS FOR LINK PRICES

One of the most popularly used on-chain metrics out there, the MVRV Ratio or the Market Value to Realised Value Ratio. The MVRV Ratio is essentially used to determine whether a crypto’s current price is above or below a ‘fair value’ and to try and assess market profitability.

Extreme deviations on either side of the graph indicate market tops and bottoms as they reflect extreme period of investor profit or less, respectively – either of which are unsustainable for the long term. For example, any any value above 3.5 in generally accepted as a top while values less than one indicate losses on the books of most investors thus a bottoming out.

In Chainlink’s (LINK) case as of writing this, we can see that after the devastating loss of value in the bear market that began in the beginning of 2022 – LINK prices are heavily undervalued and are trading close to 0.81. Thus, from a long term perspective – LINK price have a lot of space on the upside to rally.

Source: Coinmetrics.io

Thus, if we were to conclude basis the use cases that Chainlink provides along with the attractive valuation metrics for the particular coin – it can easily be agreed that Chainlink (LINK) prices have a lot of upside potential going forward as the recovery continues.

CHAINLINK PRICE PREDICTION