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Chainlink (LINK) Dominates Crypto Market Surge but Can it Continue Up?

The decentralized smart contract and data transport protocol Chainlink has enjoyed spectacular growth lately, with its LINK token gaining over 300% in the past few months.

The asset recently topped out at a new all-time high of $18 before receding and settling at its current level around $16. Considering the parabolic growth, analysts now fear a large correction is on the cards.

On its quick path to $18, LINK barely built any significant support levels other than some brief consolidation around $13. This means that any serious trend reversal could take the asset tumbling back down to previous resistance at $8.

Uncertainty has also been noted by blockchain analytics firm Santiment, which noted that many investors are moving LINK tokens onto exchanges. This is a common sign of investors preparing to sell should the market turn. For now, however, the overall crypto market remains particularly bullish and LINK is maintaining its position.

Why the growth?

One of the biggest reasons it seems LINK has been exploding lately is that it is used by so-called ‘yield farmers’ to buy tokens of a new defi protocol called Yam. YAM tokens are used by yield farmers to provide liquidity on Uniswap pools in the form of staking to earn rewards. However, the project ran into some issues two days ago due to a coding problem and now appears to have collapsed completely.

Yam is not the only defi protocol to utilize LINK though, and as the defi space continues to grow, LINK will likely keep growing too. It also has very strong technology backing it and big names like Dave Portnoy of Barstools Sports getting involved. Not to mention Michael Anderson of Framework Ventures who predicted a LINK price above $25 back in April, when it was only a measly $4. While at the time that prediction seemed hopeful, it now seems highly likely.

Chainlink explained

Chainlink is designed to operate on the Ethereum network using its popular ERC20 protocol, amongst others. It’s essentially a decentralized network of nodes that help to connect data sources that are not on blockchains to data sources that are on blockchains. Hence the name, “Chain-Link”.

It does this by aggregating data using something called ‘oracles’ and then converting that data into a format that can be stored in blockchain smart contracts This provides a highly secure and automated method of using the advantages of blockchain technology for non-blockchain-based data.

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