Chainlink Price Hangs at $12 Support: Will Whale Accumulation Spark a Move?

Chainlink price tests $12 support: Will whale accumulation trigger a move?

Chainlink's largest investors have been accumulating tokens aggressively, even as the price action remains constrained and volatile within lower ranges. Data from Santiment indicates that the top 100 LINK wallets have added 20.46 million tokens since early November, which is approximately valued at $263 million.

This accumulation trend is significant because whales usually hesitate to buy during distribution phases. They tend to increase their holdings when the downside risk seems minimal relative to the potential for price increases. Presently, the price remains below previous peaks, creating a discrepancy between whale investment patterns and general market sentiment. However, while this accumulation is notable, it does not ensure immediate price increase; instead, it signifies growing confidence among larger investors.

Can LINK Maintain Its Post-Breakout Retest?

Chainlink [LINK] has recently broken above the upper trendline of a falling wedge, marking the conclusion of a multi-month compression phase. Following this breakout, the price underwent a pullback and is currently retesting the $12.00–$12.30 range. This zone is crucial as it aligns with prior horizontal demand levels and the former resistance of the wedge, now acting as support.

Maintaining a price above $12.00 is vital to preserving the integrity of the breakout structure. A failure to hold above this level could lead to a decline towards the next liquidity level around $11.50. Conversely, successfully defending this retest could expose $14.69 as a significant resistance point, followed by a broader supply area near $18.79. The Relative Strength Index (RSI) is currently around 40, indicating weakened selling momentum, although bullish strength has yet to emerge. Nonetheless, the stabilization of the RSI, instead of making new lows, suggests a phase of consolidation rather than a continuation of downward trends.

Chainlink price action analysis Source: TradingView

Spot Buyers Continue to Absorb Sell Pressure

The spot Taker Cumulative Volume Delta (CVD) over the last 90 days clearly shows consistent buyer dominance, indicating that market sell orders are being absorbed effectively. This metric reflects actual demand instead of speculative trading. When the volume of taker buys surpasses that of taker sells, buyers are actively engaging instead of remaining passive. Nonetheless, the price has not surged yet, implying that sellers are still providing liquidity to the market.

Such an imbalance typically occurs during accumulation phases. Furthermore, strong demand from buyers minimizes the chances of further price declines, as sellers struggle to push prices lower. This sustained buy-side dominance leads to a stronger case for structural support at current levels. Unlike price movements driven by derivatives, spot-led demand tends to support longer trends. Therefore, these metrics bolster the narrative of whale accumulation and overall price stabilization for LINK.

Source: CryptoQuant

Why Are Top Traders Now Leaning Bullish?

Analysis of Binance's top trader positioning indicates a clear bias towards long positions, with a ratio of 71.4% long accounts compared to 28.6% shorts, resulting in a Long/Short Ratio of 2.50. This imbalance reveals a growing bullish sentiment among experienced traders. However, it's important to note that high long exposure can both stimulate upward movement if prices rise and exacerbate declines during sharp sell-offs.

Importantly, this long dominance is occurring after the wedge breakout, rather than during a declining phase, suggesting that traders are positioning themselves for a trend continuation rather than merely chasing current momentum. The increase in long positions also coincides with strong spot demand, which decreases the risk of purely speculative strategies. This behavior from traders indicates a cautiously optimistic outlook rather than an overheated market.

Source: CoinGlass

Liquidity Clusters Indicate Potential Sharp Volatility

The 24-hour liquidation heatmap reveals significant liquidity zones above and below the current price. Notably, large liquidation pockets exist around $12.60 and further up near $13.20. Markets often move towards such liquidity zones as forced liquidations provide trading opportunities. As a result, we may see sharp price movements as the market seeks these levels.

However, with liquidity present on both sides, the potential for volatility is increased. If prices rise, short liquidations could quickly build momentum. Conversely, a drop below support may lead to rapid long liquidations. This setup encourages a phase of volatility, which favors a strong directional movement as conviction strengthens in either direction.

Source: CoinGlass

Chainlink: Is a Prolonged Recovery Ahead?

Chainlink shows multiple signals of strengthening beneath the surface. Whale accumulation continues, spot buyers are effectively absorbing sell pressure, and traders are increasingly optimistic following a confirmed breakout. However, it remains crucial for prices to hold above the $12 retest zone. Successfully defending this level would allow LINK to reclaim higher resistance and validate the breakout structure. If this support fails, volatility driven by liquidity may hinder recovery.

Overall, the data leans towards stabilization with the potential for upward movement as long as support levels are maintained.

Final Thoughts

In summary, while there are clear indicators suggesting a potential upward trend for Chainlink, cautious attention should be given to support levels and market behaviors as trading continues.