Chainlink aims to create a network where data providers, also called oracles, are incentivized by money to provide truthful and reliable data to a blockchain. Chainlink is run by Oracle, a software that acts as an intermediary for two-way data transfer between smart contracts in the real world.
Chainlink is a decentralized network of oracles. To expand beyond just the Ethereum network, the Chainlink network acts as a bridge between the new and booming blockchain industry. The traditional administrative structures enable economies to build efficient, secure, and transparent processes. Chainlink is an Ethereum-based network secured by the Proof of Stake consensus algorithm.
People pay these node operators to give them reliable and truthful real-world data. The first step is to set up something called a requesting contract, after which the Chainlink algorithm will register this request as an event. It will set up a new matching smart contract known as a Chainlink service level contract and access data off the blockchain afterward.
This service level agreement will create three more subcontracts, a reputation contract, an order matching contract, and an aggregating contract. Chainlink’s aggregating contracts can validate data from both single and multiple sources. With all these processes combined, Chainlink seamlessly and reliably provides accurate data for smart contract execution.
With 47% liquidity of its LINK token, Chainlink has a $4,267,053,057 market capitalization. A huge amount of this token being kept under wraps can destabilize the price momentum in the long run. While the peak value was $52.8, its all-time low was $0.12. With that angle, the LINK price still carries a huge appreciation.
LINK has also been a victim of price crashes that has pushed its value to multiple-year lows. The current price is hovering around the support level of September 2020, which could be a strong indication for buyers. If you are planning to buy LINK tokens, make sure you read this Chainlink price prediction
LINK has been a strong crypto player, but the recent dumping witnessed during mid-May 2022 raises eyebrows. This could be a ripple effect of worldwide negative sentiment. From its recent lows of $6.54 on May 12, 2022, LINK has already appreciated to $9.25, a decent price rise.
The LINK token has attempted to retest the resistance near its 100 Days moving average. Moreover, since the rejection at $18 during April was near its 100 DMA curve, we can expect the LINK token to hit this moving average.
While volumes have remained similar to that in the previous months, the price elevation doesn’t justify a three-fold rise in buying sentiment as projected by the RSI indicator.
Historically, RSI reaching 61 has induced profit booking while sparking the question of whether LINK will consolidate in the coming days or succumb to profit-booking from its 100 DMA curve. LINK is barely away from its 100 DMA curve, posing a risky potential to make a quick buck.
