Markets
What’s behind the 35% LINK Rally?
Chainlink price rose to a 40-day high of $16.7 on May 18, taking its monthly gains to 34.7%, with on-chain data suggesting increased whale activity amid recent positive macro indices of the United States.
Chainlink Prices Rise as Big Investors Move Into Impending First-Run Rate Cuts
Chainlink is a world-leading blockchain oracle platform that integrates real-time price feeds of offline assets into crypto products.
Over the past year, Chainlink has secured high-profile partnerships with heavyweight trading institutions such as SWIFT, solidifying its position as an industry leader by providing critical pricing oracle infrastructure to facilitate Asset tokenization and the proliferation of real-world resources (RWA) traded on the blockchain.
In May 2024, the US Fed rate announced a third consecutive pause, while the US Labor Bureau of Statistics also reported a consumer inflation rate of 3.36%, which is lower than the 3.48 % last month and 4.93% last year.
These latest macro indices have increased optimism among market analysts that the US Fed could follow the European Central Bank (ECB) which showed the first signs of cutting rates as early as June 2024.
Analysts predict that a Fed rate cut in 2024 could lead to a boom in cryptocurrency markets, particularly in nascent sectors such as asset tokenization and real-world assets (RWA), where Chainlink has established technological dominance in the ‘last year.
23 Whales wallets Buy LINK tokens in 2 weeks
Not surprisingly, on-chain data trends show that crypto whales and large institutional investors have stepped in to purchase large amounts of LINK tokens in the wake of potentially dovish macro indexes reported in the US this month.
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The Santiment chart below represents changes in the number of Chainlink wallets holding balances of at least 100,000 LINKs (~$1.5 million). It provides real-time information on the rate at which large institutional investors join (or exit) a particular crypto ecosystem.
The chart above shows that Chainlink had 554 active whale wallets as of May 3, when the US Fed announced a rate pause. Since then, whale activity on the Chainlink network has been steadily increasing.
Following the latest dovish CPI data released on May 13th, the number of Chainlink whale wallets has now skyrocketed to 567 at the time of writing on May 17th.
This essentially implies that an additional 23 whale wallets have been active on the Chainlink network over the past two weeks, each purchasing at least $1.5 million worth of LINK tokens.
When a significant spike in investors flashes across a blockchain network, as observed on Chainlink this week, strategic investors may see it as a major bullish signal for two main reasons.
First, increased whale activity often indicates growing confidence among large investors about the asset’s future prospects. Whales are generally well-informed and have access to sophisticated analytical tools, so their actions can serve as a strong indicator of positive future performance.
Second, the accumulation of large quantities of LINK tokens by new whale wallets can create a supply squeeze, leading to upward pressure on the price. Because whales often resist long-term investment goals, the reduced supply available on the open market can drive prices higher.
Furthermore, the timing of this increase in Chainlink whale activity suggests that large investors are making strategic moves to take advantage of potential gains from an impending US Fed rate cut.
Chainlink Price Prediction: Bulls Target $20 Retest After $2.3 Billion Surge in LINK Market Cap
Chainlink’s price is hovering around $16.40 at the time of writing on May 18, having added over $2.3 billion to its market capitalization since the release of US CPI data. Increasing whale activity, following dovish economic signals, suggests LINK price may be poised for another rally towards $20 in the coming days.
Looking at the key technical indicators, LINK price has now surpassed the critical resistance at $15.97 highlighted by the upper limit Bollinger band. This alignment suggests that the bulls are now firmly in control of the near-term Chainlink market momentum.
If more whales join the buying frenzy, Chainlink price will likely surpass $20 as expected. But in case of a correction phase, LINK bull traders need to defend the $14.12 support price level to avoid losing the upside momentum.
Disclaimer: This content is informational and should not be considered financial advice. The opinions expressed in this article may include the personal opinions of the author and do not reflect the opinion of The Crypto Basic. Readers are encouraged to do thorough research before making any investment decisions. Crypto Basic is not responsible for any financial losses.
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