Oracle service provider Chainlink (LINK) has been one of the top-performing altcoins over the last few weeks shooting past $8 last week. However, the Chainlink party seems to be coming to an end with the LINK price currently under a strong retracement and dropping by another 4% in the last 24 hours.
At press time LINK is trading at $7.60 with a market cap of $4.2 billion. Also, the Chainlink trading volume has shot up by 20% to $370,072,812. During its recent price rally, Chainlink also showed a strong correlation with Bitcoin.
Chainlink On-chain Data and Analysts Expectations
Based on the on-chain data set up after the current bounce, some market analysts have been expecting a correction. This is based on Santiment’s Market Value to Realized Value (MVRV).
The market’s value-to-realized-value ratio, MVRV, serves as a gauge for market tops and bottoms. A high MVRV indicates a potential peak, while lows suggest accumulation phases.
Ali Martinez highlights data from @santimentfeed, indicating that when Chainlink’s MVRV 30D exceeded 19% in the past, $LINK experienced significant corrections. Currently, LINK’s MVRV 30D has reached 20%, implying a potential short-term correction before further upward movement.
On the contrary, if the $5.565 level doesn’t provide reliable support, Chainlink’s price may decline further. Thus it will potentially establish a new low and trigger selling pressure below this level. As per popular market analyst Michael van de Poppe, the LINK price could see a further retracement to $7.
#Chainlink will be seeking for a higher low, before finally breaking out of this range.
$7 would be optimal, but I’m not sure whether we’ll be getting that. pic.twitter.com/xbxr7MqaBY
— Michaël van de Poppe (@CryptoMichNL) October 2, 2023
Chainlink Unveils Data Streams
On Monday, October 2, the Web3 services platform Chainlink launched “Data Streams” which aims at reducing network latency. Chainlink Data Streams integrates low-latency market data and automated execution to facilitate the creation of ultra-fast and user-friendly derivatives products. The term “low latency market data” refers to financial market information delivered without significant delays.
This product adopts a “pull-based” data oracle approach, where high-frequency market data is consistently provided off-chain. Oracle reports are generated for each block, allowing users to retrieve them off-chain and subsequently validate them through their on-chain transactions. This differs from the push-based approach in which oracles proactively feed data to smart contracts at varying time intervals.
By utilizing a pull-based system, Chainlink Data Streams mitigates latency issues, reducing the time required for data packets to traverse from one point to another. Latency is a common challenge in distributed networks, as message propagation among nodes often leads to delays in finalizing and synchronizing transactions. Speaking on the development, Chainlink co-founder Sergey Nazarov said:
“Data Streams not only enables DeFi (decentralized finance) protocols to support execution speeds and a user experience that rival centralized exchanges, but to do so without compromising on the core Web3 value of fair, transparent, and decentralized infrastructure”.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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