Since mid-March, Chainlink has struggled to regain the crucial $10 support level, with the altcoin facing a downtrend that saw it plummet to a low of $8.2. Despite the weak market conditions, whale activity has surged, reflecting a strategic accumulation phase for the asset.
Notably, whales have been actively buying up LINK even as the market faced downward pressure. Data from Darkfost reveals that Binance whales have been at the forefront of this accumulation. The analysis of the top ten outflow transactions highlighted a clear uptick in whale withdrawals, with over 8,000 LINK being withdrawn daily from major outflows.
Moreover, the monthly average of outflows has increased from 2,000 LINK to 2,600 LINK per day, suggesting a heightened interest from large investors during this period of market weakness. Historical trends indicate that significant whale demand often leads to price recoveries, encouraging optimism among market participants.
As withdrawals continue to diminish the supply of LINK available on exchanges, the Exchange Supply Ratio, according to CryptoQuant, has steadily declined throughout February. At present, the Exchange Supply Ratio sits at 0.127, near its monthly lows, which further underscores the ongoing accumulation since mid-February.
Despite these positive signs, it should be noted that previous instances of accumulation have not led to significant price increases. After touching the low of $8.2, LINK has since managed to form higher highs within a minor ascending channel, though the overarching trend remains bearish. Currently, Chainlink is trading at $9.1, reflecting a daily gain of approximately 4.96%, with trading volume increasing by 74%.
The momentum indicators have also shown improvement, with the Momentum Indicator rising from negative territory to 0.41, signaling a reduction in selling pressure alongside increased buying activity. This trend is also supported by the Relative Strength Index (RSI), which jumped from 46 to 51, indicating a bullish crossover.
While these developments could position Chainlink for potential upward movement, allowing it to reclaim levels such as $9.5 and possibly retest the $10 resistance, the market remains precarious. There are indications that selling pressure persists, as net flows have turned positive, reaching 190k, pointing to recent selling activities during market gains. This situation leaves Chainlink vulnerable to a potential decline, with analysts cautioning that ongoing sales could drive the price back toward $8.4.
In summary, while Chainlink remains below the pivotal $10 mark following its support breach in mid-March and briefly dipped to $8.2, an intense phase of accumulation by whales is unfolding. This scenario could set the stage for a possible recovery. However, the overall market dynamics suggest a cautious approach as traders navigate through a landscape marked by volatility and fluctuating investor momentum.
