Chainlink (LINK) price hit a new 2023 peak of $16 on Nov. 9, before the bears forced a 10% reversal below $14.5. Vital on-chain metrics are flashing green signals for an instant rebound.
Chainlink’s price rally retraced from its yearly peak of $16 on Nov. 9. Is it the end of the LINK price rally or a buying opportunity?
Majority of LINK Holders are Targeting More Profits
LINK price declined 10% to a daily low of $14.40 following market-wide liquidations on Thursday. However, recent on-chain movements suggest that most LINK holders are still positioned for a prolonged price rally.
According to the CryptoQuant chart below, investors held a total of 149.9 million LINK in exchange-hosted wallets. As of Nov. 10, the figure has dropped to 148.5 million LINK. In essence, investors have reduced their LINK exchange deposits by 1.4 million tokens this week, cooling concerns of a large-scale sell-off.
Exchange reserves track the real-time changes in the number of tokens deposited across crypto exchanges and trading platforms. A decline in exchange reserves typically means a reduction in supply across exchange spot market supply. At the currency price of $14.50, the 1.4 million LINK exchange outflow means that $20 million worth of LINK has been removed from exchange spot markets this week.
Read more: What Is Chainlink (LINK)?
Also, when investors opt for cold storage during a price correction often indicates that investors are looking to HODL rather than join the sell-off. If demand remains steady, the scarcity caused by the drop in market supply typically triggers a price rebound.
As observed recently, Chainlink’s ongoing price breakout began around Sept. 21, just as LINK exchange reserves began to drop. If this pattern reoccurs, the 1.4 million LINK removed from exchange-hosted wallets this week could potentially put upward pressure on Chainlink’s price.
Chainlink’s rising New User Acquisition Rate Has Reached a 4-Month Peak.
Chainlink price has been on an uptrend since mid-September. On-chain data trends show that an increase in the number of Chainlink’s New Users has been a major driver behind the rally.
Triggered by global interest in asset tokenization and demand for Real World Assets (RWA), Chainlink attracted an unusually high number of new users in recent months.
As depicted below, Chainlink’s rising new user acquisition rate reached a four-month peak of 3,004 addresses on Thursday.
The New Addresses metric tracks the rate at which a blockchain network attracts new users by summing up new Chainlink wallets created daily. An increase in new wallets logically means that users are creating new accounts. And these new wallets begin to carry out transactions, which increases demand for the underlying LINK tokens.
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Hence, despite the market-wide correction, the increased demand from the new users joining the Chainlink network could prop up prices.
LINK Price Prediction: Is $20 Within Reach?
Drawing inferences from the on-chain metrics analyzed above, Chainlink looks set to snap out of the consolidation phases soon.
The Global In/Out of the Money (GIOM) data, which groups the current Chainlink investors according to their entry prices, also affirms this bullish prediction.
It, however, shows that Chainlink’s price must first scale the initial resistance at $15.40 for the bulls to be confident of reclaiming $20. As depicted below, 49,290 holders had bought 22.42 million LINK at the minimum price of $15.40 If those holders exit early, they could slow down the price rally.
But if the bulls can scale that resistance level, Chainlink’s price will likely reclaim $20 as predicted.
Still, the bears could invalidate this optimistic prediction if Chainlink’s price reverses below $10. But, in that case, the 50,730 holders that bought 62.5 million LINK at the maximum price of $10.85 could mount a support wall. If those investors can HODL firmly, Chainlink will likely avoid a significant price retracement.
Read more: How To Buy Chainlink (LINK) and Everything You Need To Know
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