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Will Chainlink Bulls Manage to Overpower the Bears This Month? 

2 mins
Updated by Geraint Price
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In Brief

  • Chainlink is a top 20 altcoin but has underperformed in the crypto market so far this year.
  • Recent on-chain activity shows that the ecosystem has struggled to retain whale interest.
  • While whale activity has dropped by half, declining supply on exchanges could spark a bullish turn.
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Chainlink’s (LINK) price has increased by 27% to reach its 2023 peak of $7.44. But compared to the 40% growth in the global cryptocurrency market, the altcoin’s year-to-date performance has been dismal.

BeInCrypto looks at LINK’s seven-day price action, supply on exchanges, and In/Out the Money (IOMAP) data to analyze performance in the coming weeks.

Chainlink generated a considerable volume of new demand, especially from whales (large investors) late in 2022. In Dec., Chainlink developers announced the launch of its staking program, which attracted significant traction for the popular price feed and blockchain data provider. 

However, recent on-chain activity shows that the ecosystem has struggled to retain whale interest. They have propelled LINK to a year-to-date peak of $7.44. 

Chainlink (LINK) Whale Transaction Count.
Chainlink Whale Transaction Count. Feb. 2023 Source: Santiment

Notably, while the rest of the altcoin market picked up steam around Jan.12, data presented by Santiment revealed that the Chainlink network began to show a decline in Whale activity. 

As of Feb. 6, the drop-off in daily volumes of large transactions, i.e. ($100,000 and above) has reached nearly 55%. This has resulted in a sideways LINK performance compared to the rest of the altcoin market.   

Chainlink is a decentralized oracle network that enables blockchain protocols to integrate off-chain real-world data into their on-chain smart contracts. 

Supply on Exchanges Flashes Bullish Signal

Interestingly, despite the drop in whale interest, the netflow of Chainlink deposits on exchanges suggests that retail accumulation may be in motion. 

Chainlink (LINK) Net Supply on Exchanges
Chainlink Net Supply on Exchanges. Feb. 2023. Source: IntoTheBlock

In the last seven days, there has been a 30% increase in the outflow of LINK tokens from top exchanges, according to data from IntoTheBlock. 

With the seven-day supply on exchanges reducing by nearly 53,000 LINK, the increasing liquidity scarcity could push the price higher, even as whale transactions continue to decline.  

What Comes Next for Chainlink?

In/Out of the Money data shows that despite the negative sentiment surrounding Chainlink, the altcoin has significant support at the $7.02 mark. 

Chainlink (LINK) In/Out of the Money analysis. Feb. 2023. Source: IntoTheBlock
Chainlink In/Out of the Money analysis. Feb. 2023. Source: IntoTheBlock

IOMAP data shows that bears that bought LINK at the $7.02 to $7.22 price point are likely to push the price further below $7.00 if $7.02 support fails to hold.

For LINK to pass $7.22 again, the altcoin has to find new market demand and stop the whale bleeding. 

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Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

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Ibrahim Ajibade
Ibrahim Ajibade Ademolawa is an experienced On-chain research analyst who began his career in Commercial Banking. He has worked with several Web3 startups and financial institutions —analyzing technical concepts and spectacular events that link the DeFi and TradFi worlds. He holds a Bachelors’ Degree in Economics and is currently pursuing an MSc. in Blockchain & Distributed Ledger Technologies.
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