Chainlink (LINK), a cryptocurrency powering the decentralized Oracle network, has shown signs that could indicate a price upswing in the coming days. Here are three key factors on-chain analysts are pointing to for a potential ChainLink rally.
Whales Taking Profits, But Smaller Investors Accumulating
On-chain data reveals a shift in investor behavior surrounding Chainlink. While large wallet investors, often referred to as “whales,” have been offloading their holdings since July, there’s been a simultaneous increase in accumulation by smaller investors with less than 1 million LINK tokens. This suggests a potential shakeout among whales, with smaller investors taking advantage of the lower prices.
Losses Mount, Signaling Capitulation?
Data from Santiment, a crypto intelligence platform, shows that Chainlink holders have collectively realized significant losses exceeding $80 million since July 1st. This high volume of selling activity might be a sign of capitulation, a market condition where investors sell their holdings at a loss due to a drop in price. Historically, capitulation events have often been followed by price increases as the selling pressure subsides.
Exchange Outflows Hint at Long-Term Holding
IntoTheBlock, another crypto analytics platform, has observed a negative net flow of LINK on exchanges for the past two weeks. This translates to roughly $110 million worth of LINK tokens being withdrawn from exchanges. When investors move their crypto off exchanges, it typically indicates a shift towards long-term holding, suggesting they believe in the future potential of the asset.
While these on-chain metrics paint a cautiously optimistic picture, it’s important to remember that the cryptocurrency market remains volatile. The price of LINK, currently hovering around $13, could still experience fluctuations in the short term. However, the accumulation by smaller investors and the potential for a post-capitulation price rise make Chainlink a cryptocurrency to watch in the coming days.