Chainlink: Why Is LINK Still Bearish Despite Increasing Whale Activity?
LINK whale activity increased to 32.76 million the past week. Despite higher shareholder inflows, market sentiment remained bearish.
Over the past two months, the cryptocurrency market has experienced extreme selling pressure. After the price of bitcoin [BTC] fell to a two-month low, most altcoins were hit hard.
Chainlink [LINK], like other altcoins, was not immune to the price decline, falling 18.61% over the past 30 days. However, last week saw a reversal of the pattern, with increased whale activity.
So far, LINK has gained 11.32 points in the last seven days. These weekly chart gains have traders and analysts speculating on the cause.
What Drives the Gains?
According to several cryptocurrency analysts, increased wholesale activity has played a key role in shaping current market sentiment. One well-known cryptocurrency analyst, Ali, shared the following on X (formerly Twitter):
“Chainlink whales have snapped up over 6.2 million $LINK this past week, totaling approximately $76.88 million!”
According to analysts, whale activities are changing the market trend with increasing buying pressure, possibly driving prices higher.
Based on IntoTheBlock analysis by AMBCrypto, the inflow of large holders has recorded a high of 32.76 million in the last seven days.
The rising wave of whale buying has boosted market sentiment, and LINK is likely experiencing a seasonal low. With its prices at their lowest level, whales were buying at the time of publication, speculating on an uptrend.
This view was echoed by Michael Van De Poppe in X, who had the following observation:
“LINK has been getting a seasonal pattern of finding bottoms in June of every year. Very likely, it’s having the same bottoming procedure in 2024 and will start to crawl upwards from here.”
As a result, buyers enjoyed low prices, which tended to increase demand for the altcoin. In general, higher demand for the altcoin drove prices higher due to buying pressure.
What LINK’s Price Charts Suggest
Analysis showed that LINK was in a sustained downtrend at the time of publication, despite the recent wave of whale buying.
LINK’s Directional Movement Index (DMI) indicated a strong downtrend, with the positive index at 10.07 below the negative index of 45. This indicates that recent losses have outweighed gains amid increased selling pressure.
Similarly, the balance volume has decreased from $311 million to $301 million over the past seven days. This suggests that volume on bullish days has not been as strong as before, indicating less buying pressure as selling pressure dominates. Further confirming a sustained downtrend, Aroon’s rising line at 28.57% is below Aroon’s falling line at 50%.
Finally, AMBCrypto’s analysis of Santiment data showed that the DAA price divergence was negative -66.35%. This showed that prices were making daily highs while DAA was making lows. This showed that despite the recent price spike, the daily directions were tightening, indicating negative market sentiment.
Can LINK Whales Increase in Price?
With the daily RSI at 39, the lowest level since May, LINK is under sustained selling pressure. However, if the influx of whales continues, a trend reversal could occur.
As a result, prices could fall to $12,114 and $11,322 respectively. On the other hand, if the recent whale activity creates buying pressure and the daily chart closes above $12,625, prices will rise to $13,585.
By Leonardo Perez