Proof-of-Reserve [PoR] is slowly emerging as a prominent aspect of the cryptocurrency ecosystem. Even though it gained traction gradually, it has started to renew investors’ faith in the industry. Chainlink’s [LINK], in particular, has been widely discussed on social media after it shared a post about PoR earlier this week.
This distributed oracle service verifies a smart contract’s reserves. In order to do so, Chainlink seeks an account’s current balance from the network via a smart contract, which then compares it to the balance indicated in the contract. This is pertinent as it bolsters the trust in the community.
While the network merely shared a post about PoR, the social strength of LINK began soaring. On Twitter, in particular, LINK hit an all-time high in terms of social volume.
Cryptocurrency social intelligence platform, LunarCrush also revealed that the asset’s social engagements surged by 42.3% over the last week.
With increased social media attention, the community expected to see a rise in the price of LINK. However, things haven’t been straightforward.
Chainlink [LINK] plummets below $7
Following a 5.20% daily drop, the price of Chainlink slipped down to a low of $6.55 all the way from a high of $7.18, earlier today. At press time, the cryptocurrency was trading for $6.77.
The short-term chart of LINK notes that the asset breached a prominent level of support at $6.76. If LINK persists in its ongoing trend, it could drop to $6.415 or even $6.264 which is its next line of support.
Additionally, the Relative Strength Index [RSI] indicator revealed that the asset was currently in the sellers’ arena.
It seems like the ongoing rally was limited to only LINK’s social sentiment. The number of active addresses in the network rose ahead of the PoR announcement. After which the metric has been dull. Currently, there are only 2,991 active addresses on the network.
As a result, LINK might struggle to break $7 in the short term. With Bitcoin noticing a minor correction, prices might drop further for the Altcoin, but an increase in volatility may swing the market in favor of LINK yet again.