Chainlink Price Surges 11.91% as 3.86 Million Tokens Withdrawn from Exchanges

Chainlink has been experiencing a significant outflow of LINK tokens from exchanges since June 20, with a total of 3.86 million tokens withdrawn. This movement has coincided with an 11.91% increase in the price of LINK, indicating a bullish sentiment among investors. The consistent outflow suggests that holders are opting for self-custody and decentralized finance (DeFi) applications over immediate selling, which reduces the liquid supply on exchanges and potentially signals a long-term bullish view in the market.

The withdrawal of LINK tokens from exchanges is a deliberate action by a large number of holders, who are choosing to hold their tokens elsewhere rather than keeping them readily available for trading. This reduces the immediate selling pressure on exchanges, which can have interesting implications for the token’s price dynamics and overall supply on trading venues. The trend of moving LINK into DeFi applications and self-custody solutions indicates a shift towards a long-term bullish view in the market, with both institutional and retail players participating in this transition.

In addition to the price growth, the LINK market has seen a surge in futures trading volume, with a 54.13% increase. This, alongside the decreasing liquid supply, suggests high speculative interest from both retail and institutional investors. Historical patterns have shown that significant outflows from major tokens, like ETH and BTC, often precede bullish momentum. This current LINK activity could similarly predict ongoing accumulation and reduced downside risk. Analysts have observed the inverse correlation between LINK's declining exchange balances and rising prices, reflecting a commitment to long-term participation in DeFi protocols and addressing the evolving dynamics within the market.

The surge in large transactions, with a 32% increase in 24 hours, highlights the active involvement of whales in the market. These significant transactions, totaling nearly $27 million, suggest that major investors are accumulating LINK, which could drive the price higher in the coming days. The technical outlook for Chainlink is at a crossroads, with on-chain data showing strong resistance levels at higher prices. Despite a short-term surge in supply, the rising optimism in derivatives markets has boosted Open Interest, indicating increased buying activity.

The Global In/Out of the Money (GIOM) indicator shows that LINK is within the "at-the-money" zone, extending from $13.06 to $14.06. In this zone, around 50,000 investors have acquired 105.38 million LINK tokens at an average price of $13.57. The immediate supply zone between $14.06 and $14.29 holds 19.83 million LINK supply by 13,720 investors. As LINK loses ground in the "at-the-money" zone, it risks a bearish turnaround due to overhead supply pressure. However, the immediate "in-the-money" zone, extending from $12.74 to $13.06, holds 11.38 million LINK tokens purchased by 13,940 investors, which could absorb the incoming supply.

The derivatives market for Chainlink shows a 3.84% surge in Open Interest, reaching $559.76 million. This increase indicates heightened optimism and buying activity in the derivatives market. The OI-weighted funding rate has also spiked to 0.0086% from 0.0004%, suggesting that bulls are paying positive funding rates to negate the imbalance caused by increased buying activity. Despite the bullish signals, Chainlink has struggled to hold its momentum, losing over 2% at press time on Monday. The token surged by 17% over the last week but started the week on a declining trend, falling below the 200-period Exponential Moving Average (EMA) on the 4-hour chart. The 50-period and 100-period EMAs are inching closer to a positive crossover, influenced by the prevailing recovery run. However, LINK must surpass an overhead resistance trendline connected by the swing highs on May 12, May 23, and June 11 to continue its upward trajectory.

If LINK drops below the 50-period EMA at $13.12, the declining trend could extend towards the $12.63 support level, which was last tested on June 18. The Relative Strength Index (RSI) is at 52, pointing downwards and reversing from an area close to the overbought zone, suggesting a quick loss of buying pressure. On the upside, any recovery hinges on a potential close above the trendline near the monthly high of $14.17. The next level of resistance emerges at $15.02, last tested on June 10.