• 16 October, 2024
News

Chainlink’s Supply Drop and Whale Dynamics Signal Potential Rebound

Chainlink’s Supply Drop and Whale Dynamics Signal Potential Rebound

Chainlink, a significant player in the decentralized Oracle network, has recently exhibited some intriguing patterns that analysts keenly observe. Historically, Chainlink has demonstrated certain levels that often preclude a price rebound. With Bitcoin and the broader crypto sector showing signs of stability, this could be pivotal for Chainlink enthusiasts.

One standout observation is the dwindling supply of Chainlink tokens on cryptocurrency exchanges. Currently, merely 15.5% of the total supply is available for trading on these platforms. Typically, a decrease in exchange supply could indicate an upcoming uptick in price, as it usually suggests that investors are moving their holdings to private wallets — presumably because they intend to hold for the longer term. This is especially intriguing when viewed alongside Chainlink’s recent market activities.

Santiment, an on-chain crypto analytics platform, recently shared a Twitter post providing insights on the current Chainlink market dynamics, pointing towards a potential bullish divergence given Bitcoin and the broader cryptocurrency market’s stability:

Contrary to what was observed during Chainlink’s price correction in June, the current landscape shows a drop in whale transactions while their holdings remain constant. In the June downturn, the volume of whale transactions and their overall holdings surged as prices plummeted. This often alludes to a market that is gearing for more bearish activity. However, the situation where whale transactions have dipped, but their holdings are steady suggests a more stable or possibly bullish market environment for LINK.

A cryptocurrency analyst, Ali, shared a Twitter post providing insights on the current performance of LINK, signaling a price correction:

Ali’s tweet carries a word of caution for Chainlink enthusiasts. The token is currently hovering precariously around the $5 support level. A failure to maintain this price point could trigger a sharp descent towards the $4 or even $3 mark, given the nature of cryptocurrency markets, where the ripple effect from one coin often impacts the entire sector, maintaining a close watch on Bitcoin and the broader market remains essential.

At the time of writing, LINK is at $5.99, with a 24-hour decrease of 0.44%. The bearish pressure is strong on LINK and has been trading in a range between $5.80-$6.05 levels for the past few hours, with support and resistance levels fighting for a break. The 24-hour trading volume is currently at $200 million, up by 44% from yesterday.  The market cap is $3,22 billion, placing  Chainlink in the 21st position by market capitalization.

To summarize, Chainlink is currently sitting at a critical juncture. The declining rate of LINK tokens on exchanges and the stability in whale holdings both hint at a bullish divergence, providing investors with a glimmer of optimism. Nonetheless, the $5 support level serves as a crucial checkpoint. If Chainlink’s price breaks below it, a significant price correction could be on the horizon.

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