Chainlink (LINK) Whale Transfer Spike, Bearish Sign?

On-chain data shows that Chainlink (LINK) whales have become quite active in recent days, a sign that could be bearish for the asset’s price.

Chainlink whale transactions have increased in number recently

According to data from on-chain analytics firm Emotion, whales traded to a 2023 high as the price dropped towards the $5 mark. The “whale transaction count” is an indicator that tracks the number of Chainlink transfers that occur on the blockchain that involve the movement of at least $1 million worth of tokens.

When this metric has a high value, it means that a large number of large-scale LINK transactions are happening on the network right now. Generally, transfers worth more than $1 million are believed to come from whales, so such a trend could be a sign that whales are currently active.

On the other hand, low values ​​of the indicator indicate that whales are not moving as much at the moment. Because whales trade on a large scale, too many of them happening at once can cause market volatility. Thus, their scarcity (i.e., lower value) may result in a more stable market.

Now, here is a chart showing the trend of Chainlink whale transactions over the past few months:

The value of the metric seems to have been quite high in recent days | Source: Santiment on Twitter

As shown in the graph above, the number of Chainlink whale transactions saw some spikes during the past week. This would indicate that the whales of the cryptocurrency would be actively trading during this period.

These high values ​​of the indicator coincided with a decline in the asset’s price to a three-year low of around $5, implying that at least some of the transactions were conducted for sell-side purposes. Can be

Interestingly, whale activity continued to increase after the coin hit a local bottom of $5 and saw a rebound. In fact, one of the biggest spikes in the metric, which set a new high for the year 2023, came just as Chainlink broke out of the bottom.

The timing of this extreme increase in whale trading could be an indication that some of these large investors saw the decline as a profitable buying opportunity and participated in some accumulation, enabling the price to rise again.

In the chart, Sentiment also displays trends in the supply of investor groups holding between 1,000-10,000 LINK and 10,000-100,000 LINK. It appears that both these groups have done some buying recently as their supply has increased, which means that market-wide buying could be taking place at lower levels.

From below, however, Chainlink has only seen one-minute gains as it is still trading pretty close to the lows. Whale trading is still at above-average levels for the year, and it is hard to say what behavior these investors may exhibit this time around.

Naturally, if the whales are still selling, LINK could see more bearish price action in the near future.

link value

At the time of writing, LINK is trading around $5.2, down 15% over the past week.

Looks like the value of the asset has plunged | Source: LINKUSD on TradingView

Featured image by Thomas Lipke on Unsplash.com, charts from TradingView.com, Santiment.net