Chainlink (LINK), the oracle-focused blockchain protocol, surpassed Bitcoin Cash (BCH) to become the eighth largest cryptocurrency starting January 18.
Chainlink’s market cap is now hovering at $ 9 billion and about $ 500 million away from its second largest crypto asset, Litecoin (LTC).
Why is Chainlink rising so fast?
Chainlink’s price is up 13% in the past 24 hours and LINK’s momentum is likely to come from the positive sentiment around DeFi.
The DeFi market as a whole has recovered strongly in recent months with AAVE and SUHI are the most recent highlights. The uptrend can be attributed to the fast-growing Total Value Locked (TVL) metric, which measures the amount of capital deployed in DeFi protocols.
As of January 18, the TVL on DeFi protocols is estimated to be around $ 24 billion and it is still growing rapidly.
Chainlink is benefiting from the growth of the DeFi space as oracles feed DeFi protocols with critical market data.
When DeFi protocols, such as lending platforms or exchanges, retrieve price data, they get it from oracles such as Chainlink and Band Protocol.
So if there are generally more users in the DeFi market, oracles are taking advantage of the DeFi market’s increasing TVL.
Where is LINK going now?
On-chain analysts at Santiment found that dormant tokens keep moving. This trend has further fueled the bull trend of several cryptocurrencies, including Bitcoin, Ether and LINK. They said:
“Dormant tokens are still moving at high speeds during this #crypto bull run, and declines in our ‘Mean Dollar Invested Age’ metric indicate the increased rate of $ BTC, $ ETH, $ LINK, $ LTC and in particular $ REN (which caused its massive + 60% week). “
With LINK surpasses an all-time highit is now technically in ‘pricing’. In technical analysis, pricing occurs when the value of an asset exceeds its record high and looks for a new cap.
Besides Chainlink’s positive techniques, the oracle provider doesn’t have many competitors except Band Protocol, which is based on the Cosmos blockchain network.
Chainlink’s network effect would likely act as another catalyst for the foreseeable future, especially if Ethereum (ETH) continues to dominate the DeFi space.