Chainlink-Ethereum integration – Brace yourself for bad weather?

• LINK gained traction after the project disclosed the update with ETH cross-chain transfers.
• The price of the token could drop below $14 in the short term.

The number of new Chainlink (LINK) addresses has increased since April 11, AMBCrypto has discovered. According to Glassnode, new addresses on the network numbered 778 as of April 10.

But as of this writing, that number had risen to 1,123. An increase in the number of new entrants to a network is a sign of improved adoption, which could increase demand for the respective token.

Source: Glassnode

More bridges, more expansion

Since hitting a yearly high in March, Chainlink had struggled to attract newcomers to its ecosystem until recently. There were, however, reasons for this increase.

According to AMBCrypto’s findings, it is no coincidence that the metric started to increase after the project’s recent integration with Ethereum (ETH).

On the same day that new LINK addresses began to increase, Chainlink released an announcement, noting that CCIP had been expanded to ETH and certain layer 2 networks under the blockchain.

CCIP is an acronym for Cross-Chain Interoperability Protocol. This protocol improves the bridging of assets across multiple blockchains. In the recent announcement, Chainlink explained:

“This upgrade means that CCIP now supports cross-chain transfer of native ETH between different blockchain networks, starting with Ethereum, Arbitrum and Optimism, which is made possible by locking and unlocking WETH token pools .”

However, increased traction is not the only consequence of this development. A closer look at AMBCrypto showed that there has been a shift in the supply of smart contracts.

For the uninitiated, the introduction of Ethereum has allowed other projects to easily enable the development of smart contracts.

On-chain data showed that Chainlink’s supply of smart contracts was around 52% in early April. However, the offer had increased to 53.81% at the time of publication.

Source: Glassnode

Some things take time

With this increase, LINK holders may be able to link more assets to other chains, including Ethereum. But in the short term, LINK price may have to face market turmoil.

This was due to the state of exchange inputs and outputs. When foreign exchange flows increase, it means traders are considering selling their assets. But a decrease suggests otherwise.

For FX outflows, an increase implies a decision to hold for potentially better gains. At press time, LINK exchange outflows were 4,086 while inflows exceeded 13,000 tokens.

Realistic or not, here is the market cap of LINK in terms of ETH

This disparity in these measurements reflects the massive sell-offs underway in the market. If inflows continue to outpace outflows, LINK price could fall below $14.

However, if the bears decide to stop selling and the bulls pile in, the price could rebound.

Source: Santiment