Chainlink (LINK) price gained 38% in September to emerge as one of the top-performing assets in the top 20 crypto rankings. Vital on-chain indicators now suggest that Chainlink will extend its winning streak well into October 2023.
By integrating off-chain price feeds into blockchain infrastructure, Chainlink has benefitted immensely from the ongoing Real World Asset (RWA) and asset tokenization wave. Can the bulls reclaim the $10 territory in October?
Despite September Price Gains, Network Activity is Still Relatively High
Last month, Chainlink was the cynosure of all eyes as it emerged as the top gainer in the top 20 crypto rankings.
On-chain data shows now that the September rally was fuelled by organic growth in Chainlink’s fundamentals rather than market speculation. More so, the bulls could still push for further gains in October.
As seen below, the first weave of the Chainlink price rally in mid-September coincided with a noticeable increase in LINK’s daily active users.
But more importantly, the Chainlink network has consistently attracted at least 1,500 Active Addresses for the last three weeks, dating back to September 11.
The last time Chainlink consistently attracted this level of network usage was back in January 2021, when LINK prices were around $20.
The Daily Active Addresses metric tracks a blockchain ecosystem’s prevailing user engagement rate. It is derived by adding the number of unique addresses that interact on a given day.
When Daily Active Addresses consistently trends at historic peaks for an extended period, as observed above, it suggests healthy and sustained organic growth.
This confirms the thesis that Chainlink is attracting significant traction courtesy of the RWA wave.
Going by historic trends seen in 2022, Chainlink’s current network activity has the capacity to carry a price valuation of up to $20.
However, it remains to be seen if this network activity will evolve into concrete market demand and LINK price appreciation.
Chainlink Exchange Supply Has Dropped to Historic Lows
In the markets, Chainlink holders appear to be preparing for further bullish action amid the boisterous network activity in October. A clear indication of this is that LINK supply on exchanges has now dropped to historic lows.
The CryptoQuant chart below illustrates that LINK Exchange Reserves dropped to 152 million tokens on October 3. Notably, this is the lowest since Chainlink introduced its native staking roadmap in June 2022.
Exchange Reserves track the total deposits that cryptocurrency holders currently hold in recognized exchange wallets. Exchange Supply typically decreases in bull markets as optimistic holders shift tokens into long-term cold storage or self-custody.
Evidently so, historical data trends show that when exchange reserves drop, LINK price has often rallied, and vice versa. This phenomenon was recently observed on July 20 and late September 2023, respectively.
In conclusion, the increased network activity seems to have boosted LINK holders’ confidence. And if historical trends are anything to go by, the current drops in Exchange Supply will likely trigger another LINK price rally in October.
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LINK Price Prediction: The $10 Mark is Within Reach
From an on-chain standpoint, Chainlink is in a prime position to reclaim the $10 mark in the coming weeks. The Global In/Out of Money Around Price (GIOM) data, which depicts the entry price distribution of current Chainlink investors, also adds credence to this prediction.
It shows that if Chainlink bulls can scale the initial sell-wall at $8, the LINK price rally could hit $10.
As illustrated below, the 43,510 addresses bought 46.4 million LINK at an average price of $8.78. If they close their positions once LINK prices near that range, they could inadvertently trigger a pullback.
But if the drop in exchange reserves triggers a supply squeeze as predicted, the Chainlink price could eventually reach $10 in October.
Still, the bears can negate this bullish prediction if the Chainlink price sinks below $5. However, the chart depicts that 68,270 addresses purchased 535.8 million LINK at the average price of $6.50.
Considering this is the largest cluster of current Chainlink investors, they will mount a significant support buy-wall.
If the Chainlink bulls fail to defend that vital support level, it could trigger a prolonged price reversal toward $5.
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