The Chainlink price bounced back on Wednesday as the Decentralized Finance (DeFi) activity rebounded. The LINK token rose to $31.4260, which was about 26% above the lowest level this month. Its total market capitalization rose to more than $13.77 billion, making it the 13th biggest cryptocurrency in the world.
Chainlink and DeFi
Chainlink is a fast-growing blockchain network that plays an important role in many areas of the industry. The platform is supported by data providers, node operators, smart contract developers, and researchers among other players. Some of its most popular data providers are Center Prime, CryptoCompare, and CoinGecko among others.
Chainlink is best-known for its Decentralized Oracle Networks (DON) that are designed to enhance and extend the capabilities of smart contracts on a target or main chains. These networks provide networking, storage, and computation capabilities with strong confidentiality and integrity.
Chainlink is widely used in some of the top industries in the world, including insurance, government, and utilities. However, its most important role is in DeFi, Non-Fungible Tokens (NFT), gaming, and randomness.
In these platforms, it is mostly used to provide up-to-date price feeds. Some of the most popular platforms that use Chainlink are Aave, Compound, and Rari Capital. Chainlink is also used in the options, futures, and synthetic assets such as those offered by Synthetix. LINK is the native token used in the ChainLink platform.
Therefore, the Chainlink price is rising because of the overall rebound of DeFi. Data compiled by DeFi Llama shows that the total value locked (TVL) in DeFi has risen to more than $183 billion. A closer look shows that most platforms like Aave, Curve, Maker, Uniswap, and Anchor have all seen their TVL rise.
From a macro perspective, the Chainlink price has risen because of the relatively weak American inflation data. These numbers give the Federal Reserve more room to maintain a relatively dovish stance.
Chainlink price prediction
The four-hour chart shows that the LINK price bounced back this week. It is trading at $31, which is slightly below this week’s high of $31.50. It has already zoomed above the 25-day and 50-day moving averages (EMA). Notably, it is hovering near the key resistance level at $30.50, which was the highest level on August 16.
Therefore, the bullish trend may soon accelerate as investors target this month’s high of $36.3, which is about 17.50% above the current level.