Chainlink (LINK), the leading decentralized oracle network, has seen its price decline by more than 5% in the past week, testing the $7 support level. However, some bullish signs emerge as large investors increase their holdings and the network launches new features to enhance smart contracts and decentralized exchanges.
Chainlink Price Drops Below $8 After September Rally
Chainlink had a strong performance in September, surging by 35% to reach a three-month high of $8.2 on October 1. The rally was driven by increased demand for the token as more projects integrated Chainlink’s oracle solutions to access reliable and secure off-chain data.
However, the momentum faded in October as profit-taking and market corrections dragged the price down. Chainlink faced resistance at the 21-day exponential moving average (EMA) at $7.33 and slipped below the $8 mark. The price is currently trading at $7.16, according to CoinGecko.
The moving average convergence divergence (MACD) indicator, which measures the trend and momentum of the price, shows a bearish signal as the blue MACD line crossed below the red signal line on October 6. This suggests that sellers have more control over the market and could push the price lower.
Chainlink needs to hold above the $7 support level to avoid further losses. This level coincides with the ascending trendline that has been supporting the price since September 11. It also aligns with the 100-day EMA (blue) and the 200-day EMA (purple), which act as dynamic support and resistance levels.
If Chainlink breaks below $7, it could trigger a sharp sell-off that could send the price to $6 or lower. On the other hand, if Chainlink rebounds from $7, it could regain its bullish momentum and aim for higher targets such as $8.2 and $10.
Chainlink Whales Increase Their Holdings Amid Price Dip
Despite the price decline, some large investors seem to be optimistic about Chainlink’s long-term prospects. According to blockchain analytics platform Santiment, there has been a 6% increase in the number of addresses holding between 100,000 and 10 million LINK since September 18.
Santiment noted that following whale activity often indicates the direction of the market, as these investors have more influence and information than average traders. The increase in whale addresses could mean that they are buying the dip and expecting a price recovery in the future.
Chainlink whales may be attracted by the network’s continuous development and innovation, which could boost its adoption and value proposition. Chainlink recently launched two major upgrades for its oracle network: Automation 2.0 and Data Streams.
Chainlink Launches Automation 2.0 and Data Streams for Smart Contracts and DEXs
Automation 2.0 is a software update that allows smart contracts to offload compute tasks to Chainlink nodes at a lower cost without compromising security. It also enables dApps to connect using log triggers, which are equivalent to the pub/sub messaging bus used to connect microservices in Web2.
Data Streams is a low-latency oracle solution that provides high-frequency market data to dApps, enabling them to deliver centralized exchange-like user experiences built on decentralized infrastructure. Data Streams can power derivatives dApps, such as perpetual futures exchanges, with faster on-chain execution and higher accuracy.
One of the first projects to leverage Data Streams is GMX, a decentralized perpetual futures exchange that runs on Arbitrum, a layer-2 scaling solution for Ethereum. GMX uses Chainlink Data Streams to access real-time price feeds for various trading pairs, such as ETH/USD and BTC/USD.
These new features could enhance Chainlink’s position as the leading oracle network for smart contracts, especially in the fast-growing DeFi sector. Chainlink currently secures over $75 billion in value across various blockchains, according to its website.
