Trader Predicts It’s Time for This Group of Tokens to Shine

Trader and technical analyst Michaël van de Poppe is regularly reporting on Chainlink (LINK) and Bitcoin (BTC) among some of the major crypto assets. Now, in a recent post, the self-proclaimed Portfolio Maximalist has raised hopes that it may be time for other oracle networks to achieve some solid gains.

Oracles Extend the Functionality of Smart Contracts

Before we move on to which coin the analyst recommends, let’s first clear up what oracle networks are. To put it simply, oracles such as Chainlink serve as a link between blockchain technology and data from the real world.

They enable smart contracts, which are automated contracts with their conditions coded directly, to access and utilise data from outside the blockchain.

This interaction is crucial because blockchains, by design, are closed systems that don’t have access to external systems or data, which limits the scope of applications that can be developed on them. 

Oracle networks solve this problem by fetching data from the outside world (e.g., temperature, prices of assets, outcomes of events) and delivering it to smart contracts in a trustworthy manner.

Other Oracles of Interest

Chainlink is the most popular and well-known oracle by a long shot, but it is far from being the only one. In fact, there are dozens of protocols aiming to knock the oracle king off its throne.  One of the more recent entrants is Pyth Network (PYTH) – this network is one of the fastest growing and serves over 40 blockchains.

Pyth currently has a market cap of USD $821m (AUD $1.25bn) which puts it in second spot behind Chainlink. Although LINK is miles ahead in terms of market cap, towering at a whopping USD $11.7bn (AUD $17.9bn). The market cap of LINK is therefore 9 times larger than that of PYTH.

Interestingly, the gap narrows when we consider trading volume – according to CoinGecko, here LINK’s dominance is only 5.9 times greater. An indication for the growing interest in PYTH.

Van De Poppe Recommends API3

In his tweet the analyst highlighted his bullish view on API3 with near term price targets of USD $4.50-5.00 (AUD $6.91-7.67).  Additionally to Van de Poppe, in a recent post RAPI3R outlines a particularly bullish case for API3. Here is a break-down of the highlights:

Reducing Circulating Supply: The token buy and burn mechanism directly reduces the circulating supply of API3 tokens, which can lead to an increase in the token’s value if demand remains constant or increases.

Providing Liquidity: By providing liquidity to the API3-ETH pair on Uniswap v2 and locking it for a year, API3 ensures that there’s enough market depth for traders, which can reduce price volatility and make the token more attractive to hold and trade.

Creating Buy Pressure: The mechanism to use the ETH side of withdrawn liquidity to buy more API3 tokens and burn them introduces an automatic buy pressure on the token, potentially boosting its price further.

Long-Term Sustainability: Using the project’s own revenue to support the ecosystem shifts reliance away from external funding sources like USDC and towards the native DAO token, aligning with decentralised principles and ensuring that the project can sustain itself through its own operations.