Chainlink: Whales show appetite for LINK, but not everything was hunky dory

• Wallets holding between 10,000 to 1 million LINK tokens added four million to their cumulative supply in the last 10 days.
• After a sustained period of rise, LINK plummeted in value over the last 24 hours. 

Chainlink [LINK] plunged by 2.21% over the last 24 hours, snapping a week-long winning streak during which the decentralized oracle network token recorded impressive gains.

Prior to the decline on 9 September, LINK had risen to $6.40, representing weekly earnings of more than 8%, according to CoinMarketCap

Realistic or not, here’s LINK’s market cap in BTC terms

Whales get ‘LINK’ed

Notably, whale investors seemed to have provided the impetus to the price movement. According to prominent on-chain sleuth Ali Martinez, wallets holding between 10,000 to 1 million LINK tokens added four million to their cumulative supply since the beginning of September.

Source: Santiment

As they own a considerable portion of a crypto’s circulating supply, whale investors contribute significantly to price changes through their transaction activity. An increase in whale ownership typically indicates a long-term bullish trend.

Retail investors not far behind

That being said, the increased interest in LINK’s prospects wasn’t just restricted to large investors. Retail investors, who held a tiny fraction of whale’s holdings, likewise opened their bags to accumulate more LINK tokens, as evidenced by data from Santiment.

Source: Santiment

Retail accumulation, while not a key trigger in boosting prices in the short term, provides valuable insights into a cryptocurrency’s appeal and mainstream adoption. After all, most financial assets, let alone cryptos, strive to become the common man’s money in the long-term.

The growing popularity was also reflected in the increased social buzz for the coin. Coinciding with the price rise, LINK’s mentions on crypto-focused groups on popular social forums like Telegram, Reddit, and Discord surged over the past week.

Source: Santiment

Read LINK’s Price Prediction 2023-2024

State of the derivatives market

While LINK succeeded in the spot market, the derivatives market proved to be a dampener. According to Coinglass, the Open Interest (OI) in LINK futures contracts stayed tepid even when spot prices were on the rise.

Source: Coinglass

A declining or stagnant OI coming alongside increasing prices is typically viewed as a bearish sign. As per conventional understanding, this happens when short-position traders buy back their assets. Hence, short covering and not fundamental demand becomes the factor behind rising prices.