Smart Money Whale Accumulates Chainlink (LINK) Amidst Price Drop
Despite a recent price drop of over 5%, an intriguing on-chain development has sparked optimism among investors in Chainlink’s LINK token. A “smart money” cryptocurrency whale wallet made a significant purchase of over $6.9 million worth of LINK from the Binance exchange during the decline. This whale now holds more than 417,000 LINK, having previously traded the token profitably this year.
LINK Trapped within Weekly Supply Zone
Chainlink’s price action is currently rangebound between $13-17, after rallying from $5 in late July to over $17 in early December. It is currently stuck within a key weekly supply zone between $16-18, which has acted as resistance since November. Breaking above this supply barrier could indicate a continuation of LINK’s uptrend, with the potential for prices to push higher towards the first target of $20 and a crucial milestone at $34.
Bullish On-Chain Metrics for Chainlink
On-chain data supports the bullish narrative for Chainlink. Metrics such as active wallet addresses interacting with LINK have seen a 63% surge in December, suggesting growing adoption. Tether and stablecoin deposits are also increasing, indicating fresh capital ready to buy LINK dips. Furthermore, Network Value to Transactions Ratio declines suggest that user growth is outpacing price gains recently, possibly indicating undervaluation of the token.
Poised for a Rally or Potential Fallback?
With whales accumulating, technical indicators pointing upwards, and adoption metrics on the rise, Chainlink appears poised to attempt breaking through its overhead supply zone. A break above $17 could lead to a rally towards $20 or even $34. However, failure to overcome this resistance opens the risk of a fallback towards $13 support or lower. Nonetheless, overall blockchain activity suggests that the LINK ecosystem continues to grow.
Hot Take: Chainlink’s Accumulation and Potential for Upside
The recent accumulation of Chainlink by a smart money whale amidst a price drop could indicate confidence in the token’s future performance. Despite the current rangebound price action, the bullish on-chain metrics and technical indicators suggest that LINK has the potential for an upside breakout. Breaking above key resistance levels could lead to significant gains, while failure to do so may result in a downward move. As the LINK ecosystem continues to grow, it will be interesting to see if it can break through its supply zone and reach new milestones.
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