Following a peak at $30.49, the price of Chainlink [LINK] has undergone a market correction, leading to a dip to $27.49.
Currently, Chainlink is trading at $28.22, showing a 3.02% decrease from the previous day.
Prior to this correction, Chainlink had been on an upward trend, with a 21.43% increase over the week and a significant 97.74% surge over the month.
The recent pullback has opened up opportunities for buying and accumulation among investors, particularly larger holders who have begun to accumulate the altcoin.
Significant Accumulation by Chainlink Whale
According to data from Lookonchain, a large investor in Chainlink has been accumulating LINK tokens amidst the recent price decline.
In the last 24 hours alone, this investor withdrew 100,000 LINK tokens valued at $2.95 million from the Binance exchange. Over the past three days, the total withdrawal amounts to 529,999 LINK tokens worth $15.5 million.
The increase in whale activity, up by 41.5% in the past day according to IntoTheBlock, indicates active participation by large holders in the network.
With a rise in whale activity, it is evident that these investors are holding onto their assets, leading to a decrease in the ratio of Large Holders Netflow to Exchange Netflow over the last week, remaining negative for three days.
A decline in this ratio usually coincides with positive market sentiment as whales accumulate, resulting in more assets leaving exchanges than being brought in by large holders.
Notably, when whales begin to accumulate, it often signifies a long-term investment strategy. Moreover, withdrawals from exchanges by large holders help alleviate potential selling pressure, presenting a bullish signal if demand rises.
Impact on LINK Price?
Despite the optimistic outlook of increased whale accumulation, the market has not yet responded positively, with LINK seeing a decline in the last 24 hours.
Nonetheless, the overall sentiment towards LINK remains bullish, supported not only by rising whale accumulation but also by a surge in the stock-to-flow ratio.
Chainlink’s Stock-To-Flow Ratio has climbed from 0, indicating oversupply, to 1618.48. This elevation points to increased scarcity, encouraging accumulation among investors and reducing market liquidity. In a scenario where demand surpasses supply, reduced liquidity can drive prices higher.
In summary, Chainlink is currently operating in a favorable market environment, supported by both whale investors and retail traders. If this positive sentiment persists, LINK is likely to surpass the $30 resistance level and aim for $32.2. However, a continued downtrend on daily charts could potentially push the altcoin down to $26.9.