Chainlink: Will whales help drive interest in LINK?

• LINK surged due to rising whale interest.
• Despite LINK’s success, the Chainlink protocol faced a drop in active users and revenue.

The crypto market has been a dynamic arena lately, with several altcoins experiencing substantial growth. Chainlink [LINK], in particular, has garnered attention with its strong performance.

Realistic or not, here’s LINK’s market cap in BTC’s terms

Whale activity on the rise

Chainlink’s recent surge can be attributed, in part, to growing whale interest. Santiment’s data revealed that the Chainlink network reached 3-month highs in whale transactions, unique interacting addresses, and trading volume.

In an environment where many altcoins are benefiting from Bitcoin [BTC] redistribution, LINK stands out.

While whale accumulation is often seen as a positive sign, it also carries risks. When large holders control a significant portion of a token’s supply, it can lead to increased price volatility. The actions of these whales can trigger sharp price movements, affecting smaller investors.

High numbers of unique interacting addresses and increased trading volume signify growing user engagement and liquidity. This can make the token more attractive to traders and investors, potentially boosting its price.

However, rapid fluctuations in these metrics can also signal speculative behavior.

Bulls LINK up

Over the past 24 hours, LINK’s price increased by more than 18%, making it the top gainer among the top 15 tokens. Due to the price rise, the MVRV Ratio for LINK surged, indicating that many holders had turned profitable.

While this can be seen as a positive sign, it may also lead to profit-taking, potentially causing a price decline.

Source: Santiment

In contrast to LINK’s individual performance, the Chainlink protocol itself faced challenges. Token Terminal’s data revealed a 50% drop in active users and a 47.5% decrease in revenue over the last month.

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The decline in users and revenue can impact the Chainlink protocol’s development and sustainability. A reduction in revenue could lead to limited resources for improving the ecosystem and addressing emerging challenges.

The falling revenue within the Chainlink protocol could be attributed to a waning interest in its products, such as Verifiable Random Functions (VRFs) and price oracles. These products form a core part of Chainlink’s offerings and are crucial for its decentralized Oracle network.

Source: Dune Analytics