Key Takeaways:
- Chainlink recently released a new protocol standard to enhance interoperability.
- LINK price spiked by more than 22% on July 20.
NEW DELHI (CoinChapter.com) — Blockchain oracle platform Chainlink’s native token LINK registered its highest single-day gains in more than two years on July 20. The uptrend likely resulted from a recent interoperability standard update that the platform released on July 17.
Chainlink introduced the Cross-Chain Interoperability Protocol (CCIP) to help build cross-chain applications and services. The protocol launched simultaneously across the Avalanche, Ethereum, Optimism, and Polygon blockchain platforms.
DeFi protocol Aave and liquidity platform Synthetix were among the early adopters of CCIP. The standard moved to the mainnet after undergoing tests by at least 25 partners across three testnets. The interoperability protocol is a key component in Chainlink’s partnership with SWIFT.
On July 20, CCIP became available to developers across five testnets — Arbitrum’s Goerli, Avalanche’s Fuji, Ethereum’s Sepolia, Optimism’s Goerli, and Polygon’s Mumbai.
Moreover, it seems traders have already started using the interoperability features of CCIP.
On-chain data service provider Lookonchain noted that two whale addresses swapped 3,074 stETH (staked ETH worth $5.87 million) and 71 ETH (worth $136,000) for 788,877 LINK tokens. The blockchain platform’s developments would likely attract more traders to the market.
Smaller traders often mimic whale trades since large transactions impact market movements, which could have spiked the Chainlink token price.
LINK Price Drops As Bears Start Booking Profits
Meanwhile, after rising nearly 23%, its highest single-day gain since May 2021, LINK’s price likely fell victim to profit booking. The Chainlink token dropped 4.7% to form a daily low near $8.05 on July 21 before recovering some of the day’s losses.
LINK’s recent price rally also helped push its 20-day EMA (red wave) trendline above the token’s 200-day EMA (green wave) trendline, forming a bullish pattern called the golden cross. Traders believe the pattern indicates positive market sentiment for an asset and, thus, consider it a bullish signal.
If the bullish pattern attracts buyers, the LINK price could rise to the resistance near $8.575. Furthermore, breaking and consolidating above the immediate resistance could help the Chainlink token price challenge the resistance near $9.5 before corrections pare gains.
Yet, if the sell-off continues, LINK’s price will likely drop to the support near $7.9. Moreover, failure of the immediate support level might force the LINK price to test the support near $7.13 before recovering.
The RSI for LINK became neutral on July 21, clocking at 69.22 on the daily charts. However, the metric remained very close to the overbought threshold of 70, which could hamper bulls’ plans of a sustained rally.
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