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LINK set to leverage demand; should investors rely on Chainlink’s oracle services

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Source: Unsplash

The latest crypto market crash highlighted the need to focus on blockchain projects that offer real-world utility. LINK is among the few cryptocurrencies in this category thanks to a business model that involves providing on-chain oracle services. But, the question is- Should you really invest in LINK?

A recent chainLink tech talk provides some valuable insights with regards to the above question. One of the key highlights of the conversation was Chainlink’s role in providing oracle services. This will be an essential part of enabling the tokenization of assets on blockchains. Its services are the decentralized on-chain equivalent of Amazon Web Services (AWS).

Invenium is one of the companies currently riding on ChainLink’s tech to provide real-time tracking of digital assets on blockchain networks. The demand for such services will boost the need for oracle services. Chainlink happens to be one of the top crypto projects operating in this particular niche especially as asset tokenization becomes mainstream.

How can LINK leverage growth in this segment?

LINK’s growth is directly tied to the level of demand for Chainlink’s oracle services since it is used to pay for access to oracle data. Expanding demand for tokenization of real-world assets should contribute to LINK’s organic growth. Such an outcome will contribute to positive price performance in the mid to long term.

LINK is currently attempting to recover from a strong bearish performance during the latest market crash. Dropped as low as $5.3 and bounced back from a long-term support line. This also means it has maintained its price within a long-term descending price channel underpinned by support and resistance.

Source: TradingView

LINK’s upside in the last five days is courtesy of the tapered sell-off after it entered the RSI’s oversold zone. The MFI highlighted slight accumulation but it seemed to be struggling with low buying pressure. On-chain metrics echo similar sentiments.

The supply held by top exchange addresses increased from 5 May and peaked on 12 May, before registering a slight decrease. This reflects the amount of LINK being transferred to exchange wallets courtesy of the FUD-induced sell-off. At the same time, the supply held by top non-exchange addresses declined since 5 May as investors sold off their LINK holdings. However, this metric has not registered an uptick, reflecting the low buying volume.

Source: Santiment

Notably, buying pressure might be about to make a comeback. The whale transaction count metric for transactions worth over $1 million registered significant activity within the last 24 hours. LINK’s current price outlook might be shrouded in uncertainty but the long-term outlook favors the bulls.

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Michael is a full-time journalist at AMBCrypto. He has 5 years of experience in finance and forex and more than two years as a writer in the crypto and blockchain segments. Michael's writing at AMBCrypto is primarily focused on cryptocurrency market news and technical analysis. His interests include motorcycles and exotic cars.

Disclaimer: AMBCrypto's content is meant to be informational in nature and should not be interpreted as investment advice. Trading, buying or selling cryptocurrencies should be considered a high-risk investment and every reader is advised to do their own research before making any decisions.