Why Chainlink Plunged 17% This Past Week

Among the worst-performing large-cap cryptocurrencies this past week was Chainlink (CRYPTO: LINK). This network's native LINK token lost 17.1% of its value over the past seven days, as of 3:00 p.m. ET on Sunday.

This move is significant, considering Chainlink's role as a leading infrastructure player supporting developers building crypto applications that require off-chain data, such as price feeds, to be ported to the blockchain. As a leading oracle network on this front, Chainlink's value in supporting the sort of innovation and growth that investors rely on (driven by other leading application-based tokens) is immense.

Let's dive into the bearish catalysts this past week which drove underperformance for this top-15 digital asset, and what this week's move may portend for Chainlink's investment thesis moving forward.

What moved the needle for Chainlink this week?

Source: Getty Images.

It was an interesting week for Chainlink, and one that, in any other environment, I'd suggest could have been very lopsided for bulls.

Chainlink announced that its oracle Network launched the "24/5 U.S. Equity Streams" solution, which aims to expand the project's data streams for DeFi protocols seeking comprehensive and real-time data. These data will be utilized to allow for real-time 24-hour trading during the week on decentralized protocols. In doing so, the expectation is that more trading will take place on-chain, and true integration between traditional finance and DeFi could ramp up more quickly than many initially thought.

Unfortunately, the broad-based market decline, which took most top digital assets in the crypto market lower this week, also affected Chainlink. Speculative capital appears to be flowing in one direction right now-and that's toward low-correlation assets viewed as stores of safety, such as precious metals. Higher-risk equities, digital assets, and other areas of the market viewed as moving in line with the broader market have taken a breather, as refreshed geopolitical and tariff worries roiled markets last weekend and into early this week.

I'm of the view that Chainlink is one of those integral infrastructure crypto projects with meaningful long-term upside. For those who want to position their portfolios toward relative value (as some big-money investors have been doing of late), LINK is one token I think is starting to look attractive as a way to play a contrarian view on macro dynamics simmering down in the coming weeks and months.

Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chainlink. The Motley Fool has a disclosure policy.