NOIDA (CoinChapter.com)— Chainlink’s native token LINK made significant price gains over the past 12 months, more than doubling from $6.07 in June 2023 to a daily high near $16.4 on June 14, 2024.
The project’s efforts to expand its ecosystem and use cases likely helped LINK price rally higher. Chainlink forged several strategic partnerships in 2023, and the trend continued in 2024. Recently, the blockchain platform partnered with Suku and launched its Cross-Chain Interoperability Protocol (CCIP) on Gnosis.
Chainlink’s partnership with Suku aims to accelerate the adoption of blockchain money transfers globally, leveraging Chainlink’s Oracle solutions and technical support.
Additionally, Chainlink’s CCIP and Automation services going live on Gnosis allow users to perform cloud computing functions, significantly reducing gas fees and enabling cross-chain interactions.
However, despite these positive developments, there is an emerging trend that suggests large holders, or whales, are losing trust in the project.
Whales Are Migrating Away From Chainlink
Despite Chainlink’s price more than doubling, the USD balance held by LINK whales has declined significantly. Whale holdings have dropped from $550.56 million on June 4, 2023, to $464.65 million on June 5, per a Santiment report.
Despite Chainlink’s price more than doubling, the USD balance held by LINK whales has declined significantly. Whale holdings have dropped from $550.56 million on June 4, 2023, to $464.65 million on June 5, per a Santiment report, representing a decrease of approximately 15.6% in their USD holdings
When considering the price increase of LINK, the reduction in whale holdings becomes even more substantial when measured in LINK terms.
Initially, whales held around 90.71 million LINK tokens, calculated from their USD balance and the price of LINK at the time.
Currently, with the USD balance at $464.65 million and LINK trading at $17.6, whale holdings have decreased to approximately 26.41 million LINK tokens, a massive reduction of around 70.9%.
This inverse relationship between whale holdings and LINK’s price suggests that whales have been offloading their LINK positions despite the price rally. This behavior could indicate profit-taking or a shift in investment strategies.
Conversely, Ethereum (ETH) whale balances have shown an upward trend, aligning with ETH’s price appreciation over the same period. This divergence indicates that while ETH whales continued accumulating, LINK whales appear to be reducing their exposure.
Another reason for ETH’s growing whale accumulation could be the spot ETH ETF approval, which market participants believe could help the prime altcoin chart new highs. As such, LINK whales might be using their profits from the Chainlink token to shore up their ETH holdings.
LINK Faces Bearish Pressure From Technical Setup
Meanwhile, in addition to the drop in whale holdings, LINK also faces bearish pressure from a technical setup called the ‘descending triangle.‘
Market analysts predominantly consider the descending triangle a bearish continuation signal.
The configuration features a downward-sloping upper trendline, which gradually reduces the price action’s highs, and a flat lower trendline, which is a consistent support level the price finds difficult to break.
Moreover, the pattern suggests that selling pressure is intensifying and consistently overpowering the buyers, leading to successively weaker rallies. In this setup, the potential price target is typically gauged by the maximum height of the triangle at its widest point.
Hence, confirming the bearish pattern might result in the LINK price dropping nearly 52% to reach the projected price target of nearly $7.4.
The LINK whales abandoning the project’s ship could force the Chainlink token to confirm the pattern.
