Chainlink Price Flashes Buy Signal as LINK Whales Accumulate

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As a seasoned researcher with years of experience in the volatile world of cryptocurrencies, I must admit that analyzing the market can sometimes feel like trying to predict the dance moves of a breakdancer on roller skates. However, upon close examination of Chainlink’s price action and on-chain data, I am cautiously optimistic about its near-term outlook.

During Asian trading hours on Wednesday, Chainlink’s price bounced back up to $10, this uptick being driven by a broader recovery in the cryptocurrency market. The spike in Bitcoin‘s price to around $57,000 has ignited a new wave of optimism among altcoins, causing them to establish a fresh low point. Additionally, an examination of on-chain data suggests increased activity among large investors, suggesting that they continue to take advantage of market dips by buying.

Chainlink Price Hints Bullish Reversal

As a crypto investor, I’ve been closely watching Chainlink, and my current outlook is bearish based on the pattern that has formed. Specifically, a falling wedge has appeared in the daily chart, which is a technical formation indicating potential price decrease. This pattern is created by two converging trendlines that eventually lead to a series of lower highs and lower lows before a significant change in direction occurs. I’m keeping a close eye on this development, as a major reversal could be imminent following the established pattern.

During the process of shaping its trajectory, the LINK price plummeted from $22.87 to $8.08 over a five-month period, equating to a substantial 64.6% decrease. Yet, the $8.5 mark, aligning with the 78.6% Fibonacci retracement level and reinforcing a wedge pattern support, has emerged as an area of significant buying interest. This level, which was a formidable resistance during the market consolidation trend spanning May 2022 to October 2023, suggests a reversal in market opinion.

In the past 48 hours, the estimated Chainlink price has risen by approximately 6.2%, significantly increasing its market value to around $6.17 billion. If this recent trend persists, it’s possible that buyers could push for a rise of over 40% to confront and potentially break through the resistance level established by the wedge pattern at roughly $14.

Chainlink Price Flashes Buy Signal as LINK Whales Accumulate

Furthermore, Intotheblock’s analysis shows a significant increase in transactions reaching 683 on Tuesday, mirroring transaction volumes at the April 2024 market bottom. This spike during a market downturn usually suggests that large investors, known as whales, are buying the asset while the market is falling. This behavior is often seen as a sign of an upcoming market recovery.

Chainlink Price Flashes Buy Signal as LINK Whales Accumulate

Despite the persistent gloomy outlook in the cryptocurrency market, there’s a hint that the upcoming period might see a change in the current downward trend, possibly indicating a reversal.

Based on the Global In/Out of the Money (GIOM) analysis, roughly 26,250 wallets presently own around 22.82 million LINK tokens, with an average acquisition cost of about $8.67 per token. This quantity is smaller than many other accumulation points, indicating potential weak support as indicated by on-chain data. The GIOM metric assesses the profitability of wallets depending on the current price versus the average purchase price, offering insights into possible support and resistance levels based on user behavior patterns.

Chainlink Price Flashes Buy Signal as LINK Whales Accumulate

In simpler terms, when the short-term moving averages (20 days) cross below the longer-term ones (50, 100, and 200 days) on the daily chart, it suggests the market trend might be headed downwards.

If chainlink buyers experience a loss of price level support during an expected market correction, there’s a possibility that the LINK token might plummet by around 35%, eventually finding a new base at approximately $5.8.

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2024-08-07 17:35