Chainlink has been the leading oracle platform in integrating traditional finance into decentralized finance. The two sides seem to be in line as exchange-traded funds (ETFs) for Chainlink are set to hit Wall Street.
Will this positive news save the declining on-chain activity and price action that seem to be taking a downward spiral?
According to a post by Nate Geraci on X (formerly Twitter), Grayscale updated its LINK Trust S-1 as they gear up to launch the first spot Chainlink ETF.
The firm will be aiming to convert this private fund into an ETF, which will be debuting this week.
The US Securities and Exchange Commission (SEC) gave a green light, and this could ignite social buzz on the altcoin. Liquidity and capital inflow were expected to rise once the ETF debuted due to institutional demand.
The Chainlink ETF exposes traditional investors to the oracle platform, which means more demand. However, this was happening against the backdrop of a weak crypto in terms of activity and price action.
On-chain data was showing weakness as the Total Value Secured (TVS) fell from $103.21 billion to $80.5 billion in only three months.
These deposits accounted for borrowed and smart contracts by all its oracles, per Chainlink Metrics.
The market consumed this declining network activity, but historical data suggested that LINK was more likely to have another red month.
Using the data since its debut in 2017, LINK has more than 60% of closing in red in December. Only three instances have been green in its LINK’s existence.
Again, every time November had closed red, the next month also had a similar outcome, except for Chainlink’s first year.
Worsening the situation was the fact that LINK had been in a consistent decline since September.
The hourly charts showed an extension of LINK’s fragility. This followed a 10% crash when the broader market was in a fall after massive liquidations. Price broke below an ascending trendline prior to this crash.
On the 12-hour chart, Ali Charts noted that Chainlink could be retesting the breakdown from the rising channel. The trend channel has been in play since July 2024.
The analyst backed this continued price crash for December, as he predicted LINK could reach $8.
However, the new social buzz around the launch of Chainlink ETF by Grayscale this week could change this outlook.
The capital inflow and liquidity from ETF hype could mitigate price decline, which is already 6% on the first day of the month.
