Chainlink (LINK), one of the best-performing alternative cryptocurrencies (altcoins) in 2020, saw another statistic reach a record high, namely the number of Twitter followers.
According to market data and research firm CryptoCompare, social media followers of the project are continuously surging past new highs. Researchers at CryptoCompare wrote:
“LINK has been one of the standout altcoin performers of 2020 and seems to be going from strength to strength. Its social media followers seem to be growing in tandem as it gains popularity.”
Social media metric of Chainlink relative to its price. Source: CryptoCompare
Social media metric is not a conventional way to measure a cryptocurrency’s trend. But it could indicate a strengthening community and improving market sentiment. At the same time, Bitcoin’s Tweet Dominance remains well above LINK’s at 41.5% to just over 5%, respectively.
Bitcoin vs. Chainlink Tweet dominance Source: thetie.io
Chainlink marches forward with new partnerships, DeFi growth
The community’s sentiment around Chainlink appears to be improving due to two factors, namely new partnerships and the growth of Decentralized Finance, or DeFi.
Chainlink, which provides oracles through smart contracts, is primarily used by DeFi protocols. Oracles provide real-time market data and DeFi platforms need to implement oracles to operate seamlessly.
DeFi protocols have two options: use existing oracle service providers or build their own oracles. The latter is more compelling because it saves costs for projects. So far, DeFi protocols like Aave and Synthetix are working with Chainlink.
Aave CEO Stani Kulechov said:
“I think part of composability is that you don't have to build everything by yourself. Chainlink's oracle is very good, and it's part of this whole composability idea, it's vital.”
As the total value locked in the DeFi market achieved a new high at $3.56 billion, it further boosted Chainlink’s usage by DeFi protocols. Other than DeFi-related growth, Chainlink recently partnered with Binance Smart Chain and German telecommunication conglomerate Deutsche Telekom’s T-Systems.
“You could even say duty as a telecom company to be a public blockchain network infrastructure provider,” Gleb Dudka, Analyst at T-Systems MMS, said in a recent interview with Cointelegraph.
Binance Smart Chain is also using Chainlink oracles to aggregate prices from exchanges, assisting Binance DEX to operate in the DeFi space.
“Chainlink oracles bring greater market coverage to DeFi applications on Binance Smart Chain by retrieving price data from data aggregators, which aggregate prices from all centralized and decentralized exchanges.”
Where does LINK go from here?
LINK remains as the only top-30 cryptocurrency in the world to be down less than 20% from record highs.
After a strong performance in July, during which it hit a new all-time high, technical analysts are cautiously bearish.
Rejection of LINK at lower time frames. Source: Michael van de Poppe
In the short-term, Michael van de Poppe, a full-time trader at the Amsterdam Stock Exchange, said LINK could pull back after a rejection.
“And rejected at $8. Might be on a slight support now, otherwise, we're going to test the lows around $7.15 again,” he noted.
For now, the market appears to be short-term cautious and medium-term positive, based on strong fundamentals, rapid DeFi growth, and high-profile partnerships.