Chainlink $60 Million in Withdrawals Signal Bullish Outlook

• Chainlink (LINK) is poised for a rally as $60 million worth of the asset has been moved from exchanges to self-custody wallets. 

• According to an analyst, Chainlink could surge to $22, however, it would first have to break out of a falling wedge to build bullish momentum.

Chainlink (LINK) looks set for an upsurge after on-chain activities and technical indicators painted a bullish picture following an extensive period of sideways movements. According to our data, Chainlink (LINK) is currently the 14th largest crypto by market cap as its price declines by 0.74% to trade at $10.5. However, its 24-hour trading volume remains 7% up at press time, with $180 million changing hands. 

On-chain Activities Looking Good

Our analysis of Glassnode data discloses that investors have shifted to a “long-term holding mode” as more than $60 million worth of the asset has been withdrawn from various exchanges for self-custody since September 10. According to CNF analysis, this scenario usually reduces severe selling pressure on the exchanges to fuel a price upsurge. 

A further look at the Chainlink historical on-chain data suggests that a staggering amount of the asset was sent to exchanges between September 5 and September 9. Expectedly, this coincided with the mini drop from almost $11 to $9.20. With the sudden change in decision, the price, according to our observation, could retest the $12 zone. 

A look at the Bulls and Bears indicator – a metric that measures the number of addresses that bought or sold at least 1% of an asset, indicates that Chainlink bulls have far higher volume than the latter. This implies that Chainlink may be less likely to repeat its recent drop to a single digit. Similarly, the Parabolic Stop-and-Reverse (SAR) indicator – a metric that determines the direction of an asset’s price while tracking the period of trend change, was right below Chainlink’s price. This implies that there could be a 26% surge to around $13.38 in the near term. 

Confirming the efficacy of this metric, we analyzed its historical accuracies and observed that it could be reliable. On August 25, the SAR indicator was above the Chainlink’s price of $12.34. By September 6, the price had dropped to $9.56. 

According to our prediction, the price could drop to $9 if bulls fail to push the price above the $11 resistance level. 

Could Chainlink (LINK) Hit $22?

Chainlink’s Market value to realized value (MVRV Ratio), for most of last week was negative. However, this turned positive, which indicates that the market value is rising above the realized value. On top of this, LINK’s Open Interest (OI) has witnessed a staggering rise in the past few weeks. On September 8, the OI was around $40 million after rising from $36 million. 

Joining Chainlink’s price discussion, a popular analyst identified as Cryptojack has predicted that the asset could make a 4X gain. Per his observation, the asset’s falling wedge must sustain above the $6 support level to hit $22. In his analysis, the falling wedge was spotted to be approaching a critical level, and a fall below this support zone could be fatal. 

According to the analyst, another requirement for Chainlink to hit $22 is a breakout from the falling wedge to prepare for a strong upsurge. 

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