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Whale Rapidly Accumulating Chainlink: What’s Going On With LINK?

A mysterious whale is rapidly accumulating Chainlink (LINK). According to Lookonchain, the unknown entity, possibly an institution, withdrew over 2.2 million LINK (worth $42.38 million) via 47 new wallets from Binance, the world’s largest crypto exchange by trading volume, in two days.

This sudden block withdrawal now raises questions about what’s driving the whale’s interest and what it could mean for LINK in the coming days.

Crypto whale accumulating LINK | Source: Lookonchain via X

Chainlink Is Key In DeFi And NFTs, Gradually Improving 

Chainlink is a popular project that provides secure middleware services and allows smart contracts to access tamper-proof external data. For this role, the platform has been adopted by multiple protocols offering decentralized finance (defi) services in Ethereum and beyond. 

Additionally, Chainlink plays a role in non-fungible tokens (NFTs) through its random number generator (RNG). It continues to release new products and enhance its features.

To illustrate, in November, Chainlink upgraded its staking mechanism, releasing v0.2, which significantly increased the pool size to 45 million LINK. 

The platform noted that the decision was to attract more investors and, more importantly, bolster its security while concurrently aligning with its broader objective of attaining the “Economics 2.0” plan.

Initially, staking began in December 2022. The goal was to incentivize participation by expanding the utility of LINK and allowing stakers to receive rewards. 

The release of v0.2 in November means more tokens can be locked, helping make LINK scarce, considering the role of the token in the vast Chainlink ecosystem. 

Trackers show that over 40.8 million LINKs have been locked so far. Chainlink confirms that anyone can earn a variable reward rate of 4.32%.

LINK staked | Source: Chainlink

Beyond staking, Chainlink’s Cross-Chain Interoperability Protocol (CCIP) is gaining adoption. To illustrate, the Hong Kong Monetary Authority (HKMA) initiated its first phase of e-Hong Kong Dollar (e-HKD) trials in November, integrating CCIP. 

As part of this trial, the regulator wanted to illustrate the capabilities of programmable payments enabled by Chainlink via its solution, CCIP. In DeFi, protocols such as Synthetix and Aave have adopted CCIP. 

Will LINK Breach $20?

With more protocols and traditional institutions leveraging the technology, the demand for LINK (and prices) will likely increase as the fear of missing out (FOMO) kicks in.

While the whale’s motives remain unknown, their large-scale LINK accumulation suggests they might be bullish on the token. Notably, it coincides with the sharp expansion of LINK prices in the past 48 hours. 

Chainlink price trending upward on the daily chart: Source: LINKUSDT on Binance, TradingView

So far, the token is changing hands slightly below the $20 psychological resistance. Any breakout above this level might lift the token to around $35 in Q3 2021.

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Whales Accumulating Maker And Aave, Path To 2024 Highs?

On-chain data suggests that whales are accumulating large amounts of Maker (MKR) and Aave (AAVE), two leading decentralized finance (DeFi) tokens. This accumulation trend coincides with a broader cooling-off period in the crypto scene days after the United States Securities and Exchange Commission (SEC) approved 11 spot Bitcoin ETFs. 

Whales Accumulate MKR And AAVE

According to ScopeScan data, Anchorage Digital, a digital asset custody firm, purchased a significant amount of MKR on January 15. The firm acquired 12,103 MKR tokens, valued at approximately $24.7 million, from Coinbase, a leading crypto exchange in the United States. 

Two whales, “0xbb5f” and “0x4a7,” also accumulated large quantities of MKR and AAVE. Specifically, “0xbb5f” bought 50,000 AAVE and 2,452 MKR worth around $5.03 million and $4.95 million from Binance, a leading cryptocurrency exchange. Meanwhile, 0x4a7 purchased 39,000 AAVE and 2,350 MKR, valued at approximately $3.95 million and $4.75 million, also from Binance.

Whales accumulating Maker and Aave | Source: Scopescan

These whale purchases signal a strong belief in the long-term potential of MKR and AAVE. Maker and Aave are two of the world’s leading decentralized lending and borrowing protocols across DeFi. MKR serves as the governance token for MakerDAO, which also manages the DAI decentralized stablecoin. On the other hand, AAVE is the governance token of Aave, a top decentralized lending platform. 

According to the latest DeFiLlama data, Maker and Aave have total value locked (TVL) of over $8.4 billion and $7.3 billion, respectively.

Top DeFi protocols | Source: DeFiLlama

Notably, whales are accumulating MKR and AAVE when the DeFi scene is recovering following the sharp contraction from 2022. The industry manages over $56 billion, with Ethereum hosting more liquid DeFi protocols, including Lido DAO when writing in mid-January 2024. 

Will Maker and Aave Rally To New 2024 Highs On Recovering DeFi?

Last year, MKR and AAVE were among the top-performing DeFi tokens, with MKR rising by over 200% and AAVE appreciating by more than 150%. Protocol-specific fundamentals, including the launch of Spark in Maker, partly drove this strong performance.

Aave launched the GHO stablecoin and the Lens protocol on the Ethereum sidechain, Polygon. Moreover, expectations of the spot Bitcoin ETF forced aggressive traders to consider top DeFi protocols, lifting altcoins.

Maker price trending upward on the daily chart | Source: MKRUSDT on Binance, TradingView

As whales accumulate, there is more headroom for these tokens to grow. Presently, AAVE and MKR are lower, based on their respective performance in the daily chart. However, overly, the uptrend remains. To illustrate, MKR is within a bullish breakout formation with a critical support level of around $1,560. Any surge past $2,300 might ignite demand, lifting the token to new 2024 highs.

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Aave V2 Operational, Will Bulls Break The 15-Month Resistance At $110?

All Aave v2 markets are now operational, the team behind the non-custodial liquidity protocol announced in a November 13 post on X. This a day after v3 markets were unfrozen following the approval from the community.

Aave is a platform where users can supply liquidity in exchange for rewards while borrowers are free to take loans while paying interest in a trustless environment.

Aave v2 Markets Unfrozen, Security Is “Non-Negotiable”

In the post, Aave said the security of the decentralized finance (DeFi) protocol remains a “priority and is non-negotiable for the community.”

On November 4, Aave said they received a report “of an issue on a certain feature.” After being validated, the protocol decided to take a step and pause the operation of their v2 markets on Ethereum. At the same time, some v2 markets on Avalanche were frozen. Even so, the v2 markets on Polygon were unaffected. 

Aave also froze operations on Aave v3 on Polygon, Arbitrum, and OP Mainnet. However, v3 markets on Ethereum, Base, and Metis were unaffected. 

While Aave v2 and v3 markets were frozen, the protocol clarified that users supplying or borrowing affected assets could still withdraw and repay their positions but couldn’t supply or borrow more. With those markets unfrozen, they can now continue as it was before.

Will Bulls Ease Past $110?

The resumption of services, looking at the AAVE candlestick arrangements in the daily chart, has not impacted prices. However, the token is trading at around 2023 highs and remains within a bullish formation as optimistic traders expect the uptrend to continue.

Aave price trending upwards on the daily chart | Source: AAVEUSDT on Binance, TradingView

Despite the uptrend, bulls have failed to break above the $110 resistance level. As it is, this reaction level marks August 2022 highs and has not been breached in the past 15 months. 

The token has more than doubled at spot rates, rising from $50, a critical support level marking January and June 2023 lows. For trend continuation, there must be a solid breakout above $110 and the $60 range from where prices have been moving horizontally in a multi-month accumulation.

Still, it is unclear how the token will react in the days ahead and whether there will be more upside momentum as liquidity increases as activity resumes on Aave v2 markets. 

Aave TVL | Source: DeFiLlama

According to DeFiLlama data, Aave is one of the largest DeFi protocols, with over $6 billion in total value locked (TVL). Most of these assets are locked in Ethereum, where over $5.1 billion of tokens are under management.

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Aave Protocol Halts Certain Market Operations Due To Bug Report

Decentralized finance (DeFi) platform Aave has suspended operations in a number of markets after receiving a problem report on a certain function of the protocol.

DeFi Protocol Discovers Vulnerability; Is User Funds At Risk?

On Saturday, November 4, decentralized lending protocol Aave announced – via a post on X (formerly Twitter) that it has paused the Aave V2 Ethereum market and suspended certain assets on Avalanche. In addition, the protocol has frozen specific assets on Aave V3 on Polygon, Arbitrum, and Optimism. 

According to the protocol’s announcement, these actions serve as a temporary precautionary measure following a problem report on a specific feature. 

Furthermore, Aave said in the post that the Aave V3 markets on Ethereum, Base, and Metis and the V2 markets on Polygon and Avalanche are unaffected. Meanwhile, no funds on any of the markets were at risk, according to DeFi lending protocol.

While Aave did not specify what the issue is or the feature that caused the problem, the protocol said it would release a detailed explanation once there is a full resolution. The statement read:

A governance proposal to restore the normal operation of the protocols will be submitted shortly. A detailed postmortem will be released once the issue is fully resolved.

Aave further clarified that users supplying or borrowing from a frozen assets pool can still withdraw and repay positions. However, these users can’t supply or borrow more funds from the frozen assets pool until the issue is resolved. The protocol added: 

On paused assets, no action can be done until unpaused.

AAVE Price Remains Steady Despite Protocol Vulnerability

There is no evidence to suggest that the problem has had any impact on the value of the protocol’s native token, AAVE. As of this writing, the token is valued at $90.15, reflecting a negligible 0.9% price dip in the past 24 hours.

Nevertheless, the token is outperforming on a bigger timeframe. Over the past week, AAVE’s price has swelled by more than 10%, touching the $100 mark – for the first time since February – at some point during the week.

Although the price of AAVE  has been moving mostly sideways in the past few days, a resolution of the current issue might trigger renewed momentum for the token. Hence, there is a chance that the cryptocurrency might revisit $100 again, especially considering the optimistic climate of the crypto market.

Aave

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Aave Price Recovers Back To $57, But Threat Of New Attack Looms Over Protocol

The Ethereum-based decentralized finance (DeFi) protocol Aave suffered an attack led by Avraham Eisenberg. The controversial individual was behind a sophisticated run against Mango Markets. The run has been called an attack by some and a clever strategy by others. 

Aave (AAVE) trades at $57 with a 7% and 36% loss in the last 24 hours and the previous week, respectively. Curve Finance’s native token CRV was also part of the attack. This token has seen significant selling pressure in the short term but has been trending to the upside over today’s trading session. 

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AAVE’s price moving sideways after a downside trend on the daily chart. Source: AAVEUSDT Tradingview

Orchestrating An Attack On Aave, First Attempt?

Rudy Kadoch, founder of the portfolio management project Nested, summarized yesterday’s event and the “Bad Debt” attack on Aave. According to this report, Eisenberg borrowed $83 million of CRV and used $50 million of stablecoin USDC as collateral on the decentralized finance platform. 

Eisenberg published the thesis that supported this strategy in October 2022 via his Twitter account. It was public, and his objectives were perfectly outlined: to leverage his initial capital to influence the price of an illiquid token, such as CRV or Ravencoin (RVN), in hopes of creating “bad debt,” an excess liability assumed by the protocol. 

To pay off this debt, Aave would trigger an auction mechanism that involves selling AAVE on the spot market. By taking a short position on this token, Eisenberg would benefit. 

By prompting the price of the underlying collateral, the Aave borrower can double or increase its price by five-fold “at least.” This attack was unsuccessful, as Kadoch noted, due to a lack of capital. The actor was trying to liquidate a CRV whale to create a bad debt. 

However, as the attack was being carried out, the team behind Curve Finance released the whitepaper for a stablecoin, crvUSD. This announcement supported the price of the token and shifted the trend. Kadoch noted: 

– $sdCRV, $cvxCRV, $yCRV depegged a lot with more than a 10% discount to get back $CRV.

– People are paying more than 200% to borrow $CRV.

– People telling Aave is not secure while the system was ready for such an event.

The Future Of Aave In Jeopardy?

On the other hand, the protocol operated as intended without centralized intervention. The team behind Aave claims that they will talk with the community and the DAO about the recent incident. 

In that sense, the protocol might introduce changes in the coming days to mitigate “long tail asset risk.” Many believe Eisenberg will resume its attack on the protocol once he can pool together more capital. 

The “Bad Debt” attack on Aave was like the situation that led to the FTX’s collapse. The failed company issued held massive amounts of FTT, its native token. When the price of the asset crashed, Sam Bankman-Fried’s empire followed. 

Unlike FTX, as many users pointed out, everyone can access on-chain information about Eisenberg’s transactions, the state of the protocol’s finance, and the amount of bad debt it held on its balance sheet. This transparency is the critical difference between centralized ecosystems and decentralized protocols. The team behind Aave stated:

Most importantly, today’s events are in contrast to those we have seen with centralized entities in the space – the transactions were entirely traceable and auditable on-chain, providing transparency for users and the community.

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How Aave Helped JP Morgan Complete Its First DeFi Transaction

Legacy financial institutions are embracing crypto and decentralized finance (DeFi), and the Ethereum-based protocol Aave is proof. Today, the team behind the protocol announced that banking giant JP Morgan Chase completed its first DeFi transaction.

This represents a major milestone for the sector that continues to see high demand and adoption despite the downside trend in the crypto market. Two years ago, the total value for the DeFi sector, as measured by the total value locked (TVL), was less than $5 billion.

In a short period, this metric will increase by over 20-fold, reaching an all-time high of around $170 billion by 2021, according to data from DeFi Llama. Today’s milestone marks a new era for the nascent sector and digital assets.

DeFi Aave AAVEUSDT

DeFi sector TVL at its high. Source: DeFi Llama

Aave Supports Major JP Morgan Transaction

According to the official announcement, JP Morgan leveraged a “modified” version of the Aave protocol. Due to its higher scalability, the project used Ethereum’s second-layer solution, Polygon. The team behind the protocol said:

The Aave protocol was utilized by involving the supply and borrowing of tokenized foreign exchange transactions, using SGD tokenized deposits (1st issuance of tokenized deposits by a bank!) issued by J.P. Morgan and JPY tokenized assets issued by SBI Digital Asset Holdings.

The transactions are part of the Monetary Authority of Singapore (MAS) led “Project Guardian.” The initiative explores ways to bridge legacy financial institutions with decentralized finances “across a broader range of use cases.”

In addition to JP Morgan, other major banking institutions are participating in the initiative, including DBS Bank, SBI Digital Asset Holding, and the Oliver Wyman Forum. These transactions are the first in a series of pilot tests to explore the potential for DeFi and digital assets to improve the interoperability and efficiency of legacy financial markets.

Aave AAVE AAVEUSDT JP Morgan

AAVE’s price is suffering losses on the daily chart. Source: AAVEUSDT Tradingview

Project Guardian was announced in May 2022, its objective is to “identify” the key areas where traditional financial institutions and DeFi protocols can collaborate. So far, the initiative has identified pilot programs to “unlock economic value,” the study of regulatory and risk management, developing technology standards, and others as areas of interest. Chief FinTech Officer at MAS, Sopnendu Mohanty, said:

The live pilots led by industry participants demonstrate that with the appropriate guardrails in place, digital assets and decentralised finance have the potential to transform capital markets. This is a big step towards enabling more efficient and integrated global financial networks. Project Guardian has deepened MAS’ understanding of the digital asset ecosystem (…).

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AAVE Price Prediction: Surges 20% This Week, Rally Could Extend Above $85

AAVE price started a major increase from the $65 support zone. It is up nearly 20% this week and might extend gains above the $85 resistance.

  • AAVE price gained pace after it surpassed the $75 resistance against the US dollar.
  • The price is trading below $85 and the 100-day simple moving average.
  • There was a break above a major bearish trend line with resistance at $75 on the daily chart of the AAVE/USD pair (data source from Kraken).
  • The pair could continue to rise and might soon test the $100 resistance zone.

AAVE Price Starts Fresh Increase

After a steady decline, AAVE price found support near the $65 zone. The price formed a base above the $65 level and started a steady increase.

There was a clear move above the $72 and $75 resistance levels. The price climbed above the 23.6% Fib retracement level of the downward move from the $116 swing high to $65 low. Besides, there was a break above a major bearish trend line with resistance at $75 on the daily chart of the AAVE/USD pair.

The price is now trading near the $85 resistance and the 100-day simple moving average. It is also showing positive signs, outperforming bitcoin and ethereum.

Source: AAVEUSD on TradingView.com

On the upside, an immediate resistance is near the $85 zone. The next major resistance is forming near the $90 zone. It is close to the 50% Fib retracement level of the downward move from the $116 swing high to $65 low. If there is an upside break above the $95 and $100 levels, the price could surge over 10%. In the stated case, the price could rise steadily towards the $100 level.

Dips Limited in AAVE?

If AAVE price fails to continue higher above the $85 or $90 levels, it could start a downside correction. An immediate support on the downside is near the $80 level.

The main support is near the $75 zone. A downside break below the $75 level could open the doors for a fresh decline towards $70. The next major support is near the $65 level.

Technical Indicators

Daily MACD – The MACD for AAVE/USD is slowly losing momentum in the bullish zone.

Daily RSI (Relative Strength Index) – The RSI for AAVE/USD is now above the 50 level.

Major Support Levels – $80 and $75.

Major Resistance Levels – $85, $90 and $100.

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How Aave’s integration with Polygon will maximize users’ profits

Aave has announced integration with Ethereum’s sidechain Polygon. Aiming to provide alternatives for DeFi applications to be used by everyone, the implementation will allow users to leverage “nearly-free” transactions.

With a “nascent ecosystem” composed of protocol such as Quickswap and Aavegotchi, Polygon is connected to Chainlink oracle service. Therefore, the information that will feed into Aave protocol will be secured. Aave team stated:

Polygon is the opportunity for the Aave community to onboard new kinds of collaterals that would be a natural fit in these Networks.

Formerly known as MATIC, this sidechain will allow users to tap into Polygon Aave marketplace to trade token MATIC and 6 additional assets including Bitcoin’s synthetic version WBTC, WETH, AAVE, and stablecoins USDC, USDT and DAI.

Aave records high growth figures

In addition, the integration will feature a “bridge” so that assets can be “exported” to Polygon’s sidechain. That way, users will be able to receive “part of the transaction fees” for paying for transactions on this blockchain using MATIC.

Currently, a Polygon Bridge is active to transfer assets from Ethereum. To access the bridge, users can employ their Metamask wallet and manually add Polygon’s blockchain.

According to the release, using the sidechain costs less than $0.01. To transfer AAVE, USDC or make withdrawals, users will pay up to $0.00006.

Prior to the implementation of EIP-1559, the Aave/Polygon integration is a highly efficient alternative to optimize costs and access new tools to generate yield.

As Aave’s team highlights, high fees on Ethereum can be, at the same time, an impediment for some users and a feature of a blockchain’s success. “Demand for the use of Ethereum” has not abated since last summer’s DeFi boom.

Aave is an example of that statement. With $6 billion in Total Value Locked (TVL), Aave has seen liquidity growth of 39% in March of this year alone. According to the team behind the protocol:

This is driven by organic growth of V1 and V2 as well as the new AMM Market for liquidity pool tokens, which already holds $60 million. Liquidity has been well utilized, generating a record level of interests and Flash Loan fees nearly reaching $10 million.

As a bonus, Aave has integrated with Taurus to enable a custody solution and with Dharma to allow bank deposits directly into the protocol.

At the time of writing, AAVE is trading at $394 with 8.67% losses on the daily chart. However, over the week AAVE is up 11.5%. Its numerous partnerships and fundamentals indicate a continuation of its upside trend for this chart.

Aave AAVEUSDT
AAVE on a correcting trajectory in the 24-hour chart. Source: AAVEUSDT Tradingview