Is Chainlink repeating history, laying the ground for new bull run?
- Whale activity around LINK has declined.
- Market indicators turned in buyers’ favor over the last few days.
Chainlink [LINK] has been following a bearish market trend as its price action plateaued over the last week. But the coming week might be different, as a few of the key metrics looked bullish on the token.
Realistic or not, here’s LINK’s market cap in BTC’s terms
Its supply on exchanges fell into a pattern of late that has historically been followed by uptrends. Regardless, there is a catch in the story.
Chainlink has a lot going on
According to CoinMarketCap, LINK’s price had dropped by over 1% in the last seven days. At the time of writing, it was trading at $5.98 with a market capitalization of over $3.2 billion.
However, investors might witness higher volatility over the coming days. Inasmuch, Santiment’s recent tweet pointed out an interesting development.
?? #Chainlink has hit a key level that has historically foreshadowed a price rebound. Presuming #Bitcoin and the overall #crypto sector stays relatively stable, $LINK's drop in exchange supply (currently just 15.5%) is hinting at a #bullish divergence. https://t.co/2GnsaNRv0O pic.twitter.com/7X7b7p4hSr
— Santiment (@santimentfeed) August 31, 2023
As per the tweet, LINK has hit a key level that has historically foreshadowed a price rebound. The token’s supply on exchanges reached a low, suggesting that investors could expect a price uptick in the coming days. Similar episodes happened in December 2022 and June 2023.
However, despite these promising updates, whale activity around the token raised a few concerns.
Crypto analyst ali_charts, via a tweet on 31 August, pointed out that during June’s price correction, whale transactions and their holdings rose. But the situation at press time was different.
On this occasion, whale transactions were declining while their holdings stayed steady, which was not something in investors’ best interest.
#Chainlink | Unlike the June $LINK price correction — where whale transactions and their holdings rose as prices fell — this time, we're seeing whale transactions decline while their holdings stay steady.
— Ali (@ali_charts) August 31, 2023
This is what investors can expect
Though whale activity suggested that LINK’s price may not go up, a few of the other metrics looked bullish. For instance, the token’s MVRV Ratio improved over the last few days, which is a positive signal.
LINK’s network growth also remained high, meaning more new addresses were created to transfer the token.
Additionally, Chainlink’s exchange outflow was high, which meant that investors were accumulating in hope for a price uptrend. On top of that, LINK’s Open Interest declined slightly while its price fell. A drop in the metric usually initiates a trend reversal.
Read Chainlink’s [LINK] Price Prediction 2023-24
Moreover, the token’s market indicators also suggested that the possibility of LINK’s price turning bullish was high. Chainlink’s Relative Strength Index (RSI) and Money Flow Index (MFI) gained upward momentum and were headed towards the neutral mark.
The likelihood of a bullish crossover was also indicated by the token’s MACD, which raised the prospect of a price rise in the coming days.