Markets
What’s behind LINK’s 35% rally?
Chainlink price soared 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 indicators from USA.
Chainlink Price Soars as Big Investors Move Into Imminent Rate Cuts
Chainlink is a world-leading blockchain oracle platform that integrates real-time price feeds of offline assets into crypto products.
Last year, Chainlink secured high-profile partnerships with heavyweight trading institutions like SWIFT, cementing its position as an industry leader by providing critical pricing oracle infrastructure to facilitate Asset tokenization and the proliferation of real-world assets (RWA) traded on the blockchain.
In May 2024, the US Fed rate announced a third consecutive rate break, while the US Labor of Bureau of Statistics also reported a consumer inflation rate of 3.36%, which is lower compared to 3 .48% last month and 4.93% last year.
These latest macroeconomic indices have increased optimism among market analysts that the US Fed could follow the European Central Bank (ECB), which has shown early signs of cutting rates as early as June 2024.
Analysts predict that a federal rate cut in 2024 could lead to a boom in crypto markets, especially in emerging sectors like asset tokenization and real-world assets (RWA), where Chainlink established technological dominance last year.
23 Whale Wallets Buy LINK Tokens in 2 Weeks
Unsurprisingly, on-chain data trends show that crypto whales and large institutional investors have been rushing to buy large amounts of LINK tokens based on the potentially peaceful macro indices reported in the US this month.
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The Santiment chart below represents changes in the number of Chainlink wallets with balances of at least 100,000 LINK (~$1.5 million). It provides real-time insights into the rate at which large institutional investors are joining (or leaving) a specific crypto ecosystem.
The chart above shows that Chainlink had 554 active whale wallets on 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 13, the number of Chainlink whale wallets has skyrocketed to 567 at the time of writing on May 17.
This essentially implies that 23 more whale wallets have been active on the Chainlink network in the last two weeks, with each of them purchasing at least $1.5 million worth of LINK tokens.
When there is a significant increase in the number of whale investors on a blockchain network, as seen on Chainlink this week, strategic investors can view this as an important 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 typically well-informed and have access to sophisticated analysis tools, so their actions can serve as a strong indicator of positive future performance.
Secondly, the accumulation of large amounts of LINK tokens by new whale wallets could create a supply squeeze, leading to upward pressure on the price. As whales often advocate long-term investment objectives, the reduced supply available on the open market can drive up prices.
Furthermore, the timing of this increase in Chainlink whale activity suggests that large investors are taking strategic steps to capture potential gains from an imminent US Fed rate cut.
Chainlink Price Prediction: Bulls Aim for $20 Retest After $2.3 Billion Rise in LINK Market Cap
Chainlink’s price is hovering around the $16.40 mark at the time of writing on May 18, having added over $2.3 billion to its market capitalization since the data was released. of the US CPI. Increasing whale activity, following peaceful economic signals, suggests that LINK price may be poised for another climb to $20 in the coming days.
Looking at key technical indicators, LINK price has now broken above a critical resistance at $15.97, highlighted by the upper boundary of the Bollinger band. This alignment suggests that bulls are now firmly in control of the short-term dynamics of the Chainlink market.
If more whales join the buying frenzy, Chainlink price will likely surpass $20 as predicted. But in case of a correction phase, LINK bull traders should defend the $14.12 support price level to avoid losing upward 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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