Retail interest in Chainlink, which acts as a bridge between cryptocurrency smart contracts and off-chain data feeds, is now at the highest level it has been in well over a year.
According to Google Trends, worldwide queries for the word “Chainlink” on the search engine reached a score of 100 in the week ended July 12, more than double what it was the preceding week. A score of 100 indicates it is the maximum number of searches observed for a term during a given time frame.
The increased retail interest in the project could be attributed to the link token’s recent meteoric price rally.
The price of link, an ERC-20 token used to pay for services on the Chainlink network, rose to a record high of $8.48 early Monday, having rallied by 50% in the last week alone. At press time, link was changing hands at around $7.90 on major exchanges, up 73% on a month-to-date basis and 350% on a year-to-date basis.
Due to the record price rally, link is now one of the best-performing cryptocurrencies of 2020 and the tenth-largest cryptocurrency by market value, according to data source Messari. Leading link are DeFi tokens including Aave’s lend protocol, which is up over 900% on a year-to-date basis. Meanwhile, bitcoin, ether, XRP and other major coins are substantially lagging.
Link’s impressive rally seems to have been fueled by Chainlink’s increased usage in the ever-growing decentralized finance (DeFi) space.
Search queries for cryptocurrencies or for any financial asset usually rise during a record price rally. However, quite often it does not translate into increased investor participation. This is because retail investors are averse to high price volatility.
However, in Link’s case, the number of new addresses and active addresses has risen sharply alongside the spike in search queries. As such, it may be surmised that the peak retail interest is translating into additional buying pressure.
Daily active addresses rose to a 13-month high of 9,263 and new addresses, as represented by network growth, set a 12-month high of 4,517 on July 8, according to data provided by Santiment, a blockchain analytics company.
Daily active addresses and new addresses are up 800% and 900%, respectively, on a year-to-date basis.
Extreme bullish sentiment?
While Chainlink’s long-term prospects may appear bright courtesy of the ongoing multi-year shift in focus from base layer protocols to middleware services, in the short run the cryptocurrency looks vulnerable to a price pullback, as the sentiment looks to have turned overly bullish.
“Chainlink is proof that no one knows what they are talking about and crypto fundamentals is basically macro sentiment, alchemy and animal spirits. I love what the team is working on, but the token is going nuts. I do not understand anything of it,” Ryan Selkis, founder of Messari, tweeted early Monday.
Meanwhile, “link token” is currently the top trending term on crypto social media, according to the data from 1,000+ social channels tracked by Santiment. “Usually when the coin’s name appears on the top of our list of social gainers/emerging trends, its price drops by an average of 8.2% within the next 12 days,” Dino Ibisbegovic, market analyst at Santiment, told CoinDesk in a Telegram chat.