Can Chainlink (LINK) Bulls Reignite Price Action This Month?

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 Price Action Shows Whales are Bailing

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. 

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. 

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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. 

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.