Can Chainlink price rally to $10 as whales accumulate?

Chainlink price fell 6% to $8.55 on Thursday as crypto investors remained concerned over a potential escalation in the U.S.–Iran war.

According to data from crypto.news, Chainlink (LINK) price fell 6% to $8.50 on Thursday as the crypto market fell, reacting to news of the U.S. preparing for a heavy attack on Iran over the next two to three weeks to secure a decisive victory.

Despite Chainlink’s price drop, a massive accumulation trend by whales suggests that large-scale investors remain bullish on the long-term prospects.

In an April 1 X post, CryptoQuant analysis of the top 10 outflow transactions showed that whales were withdrawing over 8,000 LINK tokens from Binance daily. Furthermore, the monthly average outflows for the asset have increased from 2,000 LINK to 2,600 LINK per day.

The whale withdrawals suggest that they could be moving these funds to cold storage with the intent of holding the tokens for longer periods. Commitment from large holders often sparks retail interest and thereby strengthens the price floor as it tends to reduce the total supply of LINK held on exchanges. 

Notably, exchange supply ratio data from CryptoQuant has shown a consistent drop through February. At the time of writing, the Exchange Supply Ratio stood at 0.127, near monthly lows, a sign of sustained accumulation since mid-February.

Low exchange balances also help address concerns around sudden short-term selling pressure by limiting the liquid supply available to traders. Subsequently, it can pave the way for a rapid price rebound once macroeconomic tensions ease.

On the daily chart, Chainlink price has been forming a double-bottom pattern, a bullish reversal signal in technical analysis. It is in the process of completing the second trough of the double bottom.

Other technical indicators on the daily timeframe seem to favor the bulls. Notably, the Supertrend indicator has turned green. When this signal flips green, it typically suggests that the short-term momentum is shifting in favor of the buyers.

The Chaikin Money Flow Index has also recorded a positive reading, a sign that institutional capital is steadily entering the market.

Hence, Chainlink price will likely bounce back to its March 16 high of $10 next. However, it could face a potential drop to $8 amidst the broader market downturn before its next leg up.