Chainlink has demonstrated a robust recovery, experiencing two consecutive days of gains and achieving its highest price in over a month.
Chainlink (LINK) surged to $12.3, an increase of over 53% from its lowest point this year, driven by the continuous growth of its ecosystem and applications.
According to data from DeFi Llama, Chainlink holds the largest market share within the oracle sector, boasting a total value secured of $23.3 billion. This figure exceeds that of competitors like WINKlink, Chronicle, and Pyth Network, which collectively have a total value secured of $20.5 billion.
Chainlink’s recent price increase coincides with growing optimism among investors regarding a revival in the DeFi sector. AAVE (AAVE), a central component of Chainlink’s ecosystem, has climbed to its peak since April 2022.
There are encouraging signs that Chainlink’s ecosystem is broadening. This week, Stader Labs incorporated its Cross Chain Interoperability Protocol, facilitating token transfers across Arbitrum, Ethereum, and Optimism. Other notable recent integrations with Chainlink include Arcadia Finance, Backed, and Nexera, previously known as AllianceBlock.
The increase in Chainlink’s price is also attributed to rising demand for the token and its futures. Data from CoinGlass indicates that futures open interest has climbed to $187 million, representing its highest level since July 24.
Moreover, information gathered by CryptoQuant through August 20 reveals a downward trend in balances across exchanges. A decrease in coins held on exchanges suggests that many investors are opting to hold onto their tokens.
Nevertheless, data from Nansen indicates that LINK experienced a centralized exchange inflow of nearly $5 million within the last 24 hours. Such inflows suggest that some investors may be starting to divest.
Another significant trend reveals a decline in the number of smart money investors holding LINK, which has dropped from 133 in December to 97. The amounts held by these investors have decreased from over 2.4 million in October of last year to 900,000.
A potential concern for Chainlink investors is the 373 million tokens, valued at $4.2 billion, that remain locked. Recently, developers unlocked tokens worth $208 million, most of which were transferred to Binance. Future token unlocks may lead to substantial dilution for current investors.
Chainlink price approaches critical resistance
On the daily chart, Chainlink has rebounded from the year-to-date low of $8.01 to $12.3. The asset has converted the 23.6% Fibonacci Retracement level at $11.52 into a support level. Additionally, it has surpassed the 50-day moving average, with the Relative Strength Index now at 64.
The RSI is an oscillator that gauges the rate of change of an asset’s price. It increases when the asset gains momentum. More upward movement could be confirmed if LINK breaches the key resistance level of $12.68, established as a peak on August 26.
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