Chainlink is joining forces with Smart Chain Arena and Cryptonomic to provide the Tezos developer community with real-time data feeds via its decentralized oracle network. Now, anyone building smart contracts on top of the Tezos protocol will be able to access off-chain resources and use this data within their on-chain applications.
“Providing Tezos developers with the most secure and reliable oracle solution is essential to advancing the Tezos ecosystem… Chainlink’s secure decentralized oracle network makes possible a plethora of new use cases across DeFi, Equities, Insurance, and much more,” said Vishakh, co-founder of Cryptonomic.
The integration of Chainlink’s oracle solution will make it easier for developers to build on top of Tezos. Essentially, they will be able to avoid the pitfalls of creating a decentralized pricing feed on their own. This process is described by Sergey Nazarov, the head of Chainlink, as a big onion due to the problems discovered after each layer.
As Chainlink expands its utility and Tezos eases the development of smart contracts applications, both cryptos will likely benefit substantially from the partnership in the long run.
Social Engagement Metrics Explode
The announcement sparked interest among market participants. Tezos was Chainlink saw a significant spike in their social engagement metrics, according to crypto insights provider LunarCRUSH. The firm reported over 790,000 social interactions for each of these altcoins around the time the news broke.
Roughly 80% of the chatter regarding XTZ was bullish while 78% of the social media interactions regarding LINK shared optimistic views.
Tezos vs. Chainlink Social Engagement Metrics. (Source: LunarCRUSH)
Tezos and Chainlink Rebound Sharply
The spike in interest allowed Tezos to bounce off the 61.8% Fibonacci retracement level rising over 9%. XTZ moved back to $2.90 and it is now consolidating between the 23.6% and 38.2% Fib levels.
The inability to determine in which direction the trend will result makes this area a no-trade zone for intraday traders.
Breaking above this area may see an increase in the buying pressure behind XTZ with the potential to push its price to $3. Conversely, a candlestick close below the 38.2% Fib level could see the smart contracts token pull back to the 50% or even the 61.8% Fib level.
These support barriers sit at $2.80 and $2.75, respectively.
Tezos Consolidates Between the 23.6% and 38.2% Fib Levels. (Source: TradingView)
Along the same lines, demand for Chainlink rose around the 61.8% Fib level. This allowed it to regain the 23.6% Fib level as support. Another increase in buy orders around the current price levels may see LINK revisit the recent high of $4. Yet, failing to hold above the 23.6% Fib level could see it retrace to $3.8 or lower.
Chainlink Turns the 23.6% Fib Into Support. (Source: TradingView)
Overall Crypto Market Sentiment
The recent announcement about the integration of Tezos into Chainlink’s oracle network may have increased the demand for these cryptocurrencies. However, the overall market structure suggests that a correction is underway.
The head of Hedge Fund Telemetry, Thomas Thornton, who has been extremely accurate at predicting tops and bottoms recently issued a warning about the crypto market reaching “overbought” territory. The analyst noted that the Tom Demark (TD) Sequential indicator presented a sell signal for Bitcoin. This could potentially affect the rest of the market.
As Bitcoin’s halving approaches the market appears to be entering a period of exuberance and high volatility.
The erratic behavior may result in a steep decline like it happened in the previous halving. Investors must remain cautious to avoid adverse market conditions.
Featured Image from Unsplash
