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Chainlink Roars With 16% Weekly Gain: Analysts Predict Further Momentum

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In a week marked by positive momentum for the crypto market, Chainlink emerged as a standout performer with a staggering 16% gain in its LINK token. Santiment’s recent tweet highlighted notable double-digit market cap rises for Chainlink, BitcoinCash, Maker, and THORChain, suggesting a broader positive trend in the crypto space.

The LINK token’s price journey is particularly impressive when compared to other top 20 cryptocurrencies, which experienced lackluster performances. Starting the week at $6.09, LINK reached a peak of $8.12, outshining its counterparts.

LINK 7D graph coinmarketcap 2 1
Source: CoinMarketcap

The driving force behind Chainlink’s robust performance lies in the heightened activity within its ecosystem. On September 21, the network address activity hit a two-month high, witnessing interaction from nearly 4,000 unique addresses. 

This surge is attributed to the growing adoption of the Cross-Chain Interoperability Protocol (CCIP) by both decentralized finance (DeFi) developers and traditional financial institutions.

Future Prospects for Chainlink

Crypto strategist Kevin Svenson sees this as a promising sign for Chainlink’s future. With a substantial following on YouTube, Svenson suggests that LINK is on the cusp of reversing its multi-year downtrend. He points to the recent breakthrough above the 500-day simple moving average (SMA), a key indicator of a potential macro shift.

YouTube video

Svenson comments on the technical aspects, “Chainlink is breaking the 500-day SMA. Getting above these longer-term SMAs is usually a sign of a macro shift taking place.”

While Svenson envisions a short-term bullish momentum for LINK, he cautions that it might take more time before entering a full-fledged bull market. The analyst identifies a macro downward resistance line at around $10.90, emphasizing an area of interest between $10.13 and $11.

In the event of a breakout, Svenson anticipates a possible retest of lower levels before a sustained upward trend. The crypto community is now closely watching Chainlink’s movements as it navigates these critical levels, with October potentially holding more positive surprises for this leading decentralized oracle network.

Related Reading | Crypto Coins on the Radar for October 2023

DeFi TVL crashes by over 37% in less than a Fortnight

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In what seemed like defi heading for another hot summer, instead felt the burn of the market-wide sell off.

It world of decentralized finance has been one of the biggest drivers of the surge in the broader cryptocurrency market over the past few months. However, the space has taken quite the beating after the series of massive corrections unfolded in the market last week.

According to the most recent DeFiLlama stats, the total value locked [TVL] across all decentralized finance platforms tumbled from an all-time high of $164.2 billion on May 10th to $95.5 billion two weeks later.At the time of writing, the TVL value had noted minor recovery and was found to be at $102.9 billion. However, it was still down by more than 37% in a period of fewer than two weeks.

DEFI
DeFi TVL crashes by over 37% in less than a Fortnight 3

It all started with Tesla Technoking, Elon Musk blocking Bitcoin payments which sparked the first major instance of sell-off. Bitcoin also suffered a setback after the hackers of Colonial Pipeline siphoned off with $90 million in a BTC ransom. In addition, China’s back-to-back reports on crackdowns of the cryptocurrency space further proved damaging.

DeFi tokens crumble

The crash in the defi space’s TVL is a result of the depreciation in the value of the tokens. The correction in the market has hit investors hard, especially the newer cohort, most of whom forayed the ecosystem at the beginning of the bull season that started late last year.

Over the past week, these tokens have tanked way more than Bitcoin [BTC] and Ethereum [ETH]. Top tokens such as Uniswap [UNI], Chainlink [LINK], Aave [AAVE], Maker [MKR] was still down by more than 45%, 40%, 44%, and 24% respectively.

Several projects on the decentralized finance space this quarter either pulled the rug or executed an exit scam or suffered a flash loan. These were especially observed on multiple Binance Smart Chain protocols which further added to the investors’ woes.