Can a 4-year low in exchange reserves fuel Chainlink’s next bullish leg?
Chainlink exchange reserves fell to a 4-year low, showing accumulation was steady and ongoing.
The total crypto market cap fell by 1.91% in the last 24 hours, from $2.66 trillion to $2.61 trillion. Bitcoin [BTC], for its part, fell 2.1% in 24 hours, continuing its slide that began last Friday. In fact, BTC faced rejection at $81.3K, bringing its weekly losses to 5.4%.
Reacting to these losses, Chainlink [LINK] also lost 3.66% of its value. Starting on 2nd September, LINK had rallied by 25.46% to climb from $10.9 to $13.68 in just under a week.
However, it was trading at $11.48 at the time of writing, a deep retracement of the rally earlier this month. Even so, its price structure remained bullish. What can LINK traders and investors expect next?
Accumulation and retained activity give Chainlink bulls hope
LINK’s exchange reserve was at its lowest since mid-2022. The steady decline over the past year indicated accumulation trends and investor anticipation of a recovery.
This longer-term holding behavior has been accompanied by greater trading volume over the past six weeks, when the altcoin began to make its recovery from $7. CryptoQuant data showed that the Futures taker CVD was buy-dominated until 8th September, confirming recent aggressive demand.
In a post on X, crypto intelligence platform Santiment observed that active addresses peaked at 5,572 a day in August. However, they have fallen to around 4,821 since.
New addresses peaked at 1,601, with the same around 1,140 at press time. About two-thirds of the activity uptick has been retained, and a quarter of the new addresses surge has held.
Sustained activity would be a good sign of users returning to the market and would be a good sign of demand and Chainlink’s recovery.
What does Chainlink’s price action reveal?
The daily timeframe revealed a bullish swing structure now that the previous swing high at $10.87 was comfortably breached. The descent below the short-term support at $12.11 meant a move to $10.35, and possibly as deep as the 78.6% Fibonacci retracement level at $8.44.
The RSI returned to neutral 50 to reflect the momentum shift in recent days. The OBV saw a minor decline since the late-August peak, but its uptrend since July remained intact.
Investors can maintain a long-term bullish bias, but might also need to prepare for a pullback to $10.35 or $8.44.
Final Summary
- Chainlink exchange reserves fell to a 4-year low, showing accumulation was steady and ongoing.
- Aggressive derivatives demand and heightened on-chain activity marked the recent rally.
