Chainlink's Future: Insights After Large Wallets Absorb Supply

Recently, significant withdrawals of Chainlink (LINK) from Binance suggest that large investors are transitioning toward long-term holding. This shift is reducing the supply available on exchanges and alleviating selling pressure. Despite these changes, the price has not yet reacted significantly, indicating a strategy of deliberate accumulation rather than speculative buying. As supply tightens, sellers may lose leverage, leading to a more stable market.

Key Takeaways

Large Chainlink withdrawals from Binance indicate a shift towards long-term holding.
A substantial wallet drained over 329,000 LINK, reducing liquid supply.
Despite reduced exchange supply, Chainlink’s price has not surged, indicating strategic accumulation.
Persistent buy-side absorption points toward higher breakout potential.
Short liquidations are outpacing long liquidations, suggesting confidence among buyers.

Chainlink Faces Resistance with Strong Demand

Historically, Chainlink traded within a critical demand zone, where buyers actively defended the price. This area halted a broader price decline, leading to stabilization. Recently, LINK has rebounded toward the descending channel's resistance, marked between $13.20 and $13.50. Nevertheless, the asset still needs to breach key overhead levels. The first major resistance for LINK stands at $14.65, followed by a pivotal level at $16.66, which previously served as a distribution point. A sustained failure to hold above $12 could open the door for further downside movement. Therefore, acceptance above the channel resistance could signify a more substantial trend change if consistent demand persists.

Chainlink price action analysis Source: TradingView

Ongoing Buy-Side Absorption Creates Stability

The Spot Taker Cumulative Volume Delta (CVD) over the past 90 days has shown a consistent positive trend, indicating sustained buying interest even amidst sideways price action. At the time of writing, this indicator confirmed a dominance of buyers absorbing sell orders, showcasing a pattern of accumulation rather than distribution. Despite this, prices have not experienced a sharp rise, suggesting strategic patience among investors. The absence of sudden CVD reversals indicates solid buyer conviction without heavy reliance on leverage, thus limiting selling pressure and causing price levels to compress into tighter ranges. Over time, persistent buy-side absorption below resistance could increase the likelihood of a significant upward breakout.

Source: CryptoQuant

Liquidation Trends Reflecting Market Stability

On December 26, liquidation data illustrated diminishing downside pressure within the derivatives market. During this period, short liquidations amounted to approximately $59.46k, whereas long liquidations were merely $10.55k. Notably, Binance recorded $26.94k in short liquidations against only $9.89k for long positions. Bybit also experienced significant short liquidations totaling $24.76k, while long liquidations remained minimal across platforms. This scenario indicates that sellers faced most of the forced exits, with longs largely intact, reflecting overall confidence rather than panic. The moderate spike in liquidations further confirms the presence of controlled leverage, favoring stability in the market while reducing the chances of drastic downside fluctuations.

Source: CoinGlass

Conclusion

In summary, Chainlink appears to be trading in a crucial zone between $11.75 support and $14.65 resistance. The combination of exchange outflows and reserve accumulation is contributing to reduced selling pressure. Current price consolidation beneath key resistance suggests balance rather than weakness. With buyers continuing to enter the market and liquidation data pointing to limited downside risk, LINK's price is likely to remain stable as long as it stays above $11.75. A decisive move above $14.65 could propel the price towards $16.66, supported by favorable supply conditions for further upside.

Final Thoughts

As Chainlink navigates its current market landscape, the dynamics of supply and demand will play a critical role in its trajectory moving forward.