Chainlink’s price witnessed a turnaround from its bearish trends with an 11% surge in 24 hours, reaching $11.85 at the current moment due to traders pulling their LINK tokens from exchanges.
Data from CryptoQuant reveals that over the past month, there has been a consistent outflow of LINK tokens from spot exchanges. Particularly, on November 4th, LINK withdrawals hit a monthly peak, indicating a reluctance among traders to sell their LINK tokens.
This sudden surge in outflows signals a decrease in selling pressure, potentially setting the stage for a bullish reversal in LINK’s price trajectory.
Who Is Driving LINK’s Recent Rally?
In order for LINK to break free from its bearish trends and achieve substantial gains, it requires substantial support from buyers. An analysis of the four-hour chart indicates a growing bullish momentum in buying pressure.
The Relative Strength Index (RSI) has climbed to 71, reflecting a bullish momentum, with a noticeable uptick in buying activity fueling the recent price uptrend. The Chaikin Money Flow (CMF) also points to increasing buying pressure, registering a positive flip and reaching 0.17.
If this buying trend persists, the next price target for LINK stands at the 1.618 Fibonacci level ($13.13). Additionally, the V-shaped recovery on the four-hour chart exhibits a robust rebound from the downtrend, instilling confidence in LINK’s upward trajectory.
Aside from buyers, the escalating activity on the Chainlink blockchain might also serve as a growth catalyst.
Increasing Utilization of Chainlink’s Blockchain
Recent data from Santiment indicates that Chainlink has emerged as the leading Real World Asset (RWA) project based on development activity, which has surged by over 14,000% in a month.
A parallel rise is observed in the daily active addresses on the Chainlink network, jumping from 1,930 to 2,750 within four days.
The uptick in active addresses typically signifies heightened network usage and interaction, serving as a positive sign that could foreshadow price appreciation.
Notable Increase in Open Interest
Derivatives data suggests a resurgence in speculative interest around LINK. After a period of declining Open Interest earlier, it has rebounded to $203 million presently. This resurgence coincides with a spike in Funding Rates to a monthly high, indicating that derivative traders are increasingly taking long positions and anticipating further Chainlink price gains.
The diminishing selling pressure and the growing interest from both spot and derivative traders may serve as the driving force for LINK to surge to new highs.