Chainlink: Will $5 Million in Whale Purchases Propel LINK to $14?

Chainlink has experienced a drop to $13.03 after facing resistance at $14.2 last week. However, it showed signs of recovery, closing at higher levels for two consecutive days. At the time of writing, the altcoin was trading at $13.38, reflecting a 1.28% increase on the daily charts, with its trading volume surging by 63% to reach $314 million. With LINK currently below its short-term resistance, investors, particularly large entities, are seizing the opportunity to buy at lower prices.

Key Takeaways

Price Movement: Chainlink dropped to $13.03 but showed recovery signs by closing higher for two days.
Whale Activity: Two significant wallets purchased a total of 414,935 LINK tokens for approximately $5.48 million.
Buy vs. Sell Volume: There was more buy volume (3.17 million) than sell volume (2.6 million) recently, indicating strong accumulation.
Market Sentiment: Increased whale purchases suggest renewed confidence in Chainlink's price potential.
Resistance Levels: LINK's resistance is at $14.2; strong buying could push it back towards that level.

Whale Purchases Boost Chainlink's Prospects

Following a decline from $14.2, Chainlink's whale activity shifted from buying to selling, with little significant whale purchases recorded between January 7 and 10. However, over the past 24 hours, the market sentiment turned positive as whales returned to buy more of the digital asset.

The Whale Buy Activity indicator on TradingView showed a spike in purchases from large players, with the total trading volume exceeding 1.7 million LINK.

Chainlink whale buy activity

According to Onchain Lens, the number of newly created wallets has increased, indicating fresh interest in accumulating LINK. One wallet bought 202,607 LINK tokens valued at about $2.7 million, while another acquired 207,328 LINK for around $2.78 million. In total, these two wallets, likely operated by the same market participant, purchased 414,935 LINK tokens totaling $5.48 million.

Data from Coinalyze also illustrated that Chainlink buyers were outpacing sellers between January 10 and 12, showing a positive Buy Sell Delta.

Chainlink buy sell volume

During this timeframe, Chainlink recorded a Buy Volume of 3.17 million compared to a Sell Volume of 2.6 million, resulting in a market delta of 0.57 million—a clear indicator of strong accumulation by buyers. When whales tend to buy during market dips, it often suggests a high level of confidence in the asset's future performance.

Can Increasing Demand Propel LINK Towards $14.2?

Chainlink has demonstrated resilience and potential for recovery following its recent price drop. Its upward momentum has strengthened, as shown by the Stochastic RSI, which made a bullish crossover and reached a level of 48, although it remains below the bullish threshold.

A rising RSI indicates that buyers are attempting to take control of the market. If the RSI can rise past 50 and enter the bullish zone, it may reinforce the strength of the positive trend.

LINK RVGI & RSI

Despite this positive momentum, the Relative Vigor Index (RVGI) was still below its signal line as of the latest data. This suggests that selling pressure is still present, implying that for a significant price reversal to occur, the RVGI must also make a bullish crossover.

If the demand from the previous two days continues to pressure sellers, LINK could reclaim $13.7 and aim for the critical resistance at $14.2. However, the threat of sellers increasing pressure remains; if selling escalates, LINK’s upward potential could stagnate, with $12.9 identified as a crucial support level.

Conclusion

Chainlink's recent whale purchases and positive trading activity showcase a growing confidence in its price trajectory. If this momentum continues, LINK may be positioned to challenge its resistance level of $14.2. However, market participants should remain cautious of potential selling pressure that could inhibit upward movement.