Whales make a splash by joining the $130 club.
The price of Chainlink (LINK) has remained stagnant after surpassing the $20 mark on February 10. On-chain data indicates that whale investors, who hold a significant amount of LINK tokens, may trigger a pullback by booking profits.
CHAINLINK’s price has been steadily increasing in recent months due to the importance of the LINK token in the asset tokenization and Real World Assets (RWA) sectors.
However, there has been a rapid selling trend among whale investors, which poses a threat to the rally. Over the past 10 days, these investors have offloaded 7 million LINK tokens.
Institutional interest in the asset tokenization wave has grown since the approval of the Bitcoin spot ETF in mid-January, which has given the cryptocurrency sector more credibility. Chainlink plays a central role in the Real World Asset sector by providing off-chain price feeds to blockchain protocols.
Between February 1 and February 12, the price of Chainlink increased by 35%, surpassing the $20 barrier for the first time since January 2022. However, many major stakeholders have been holding LINK at a loss for nearly 24 months, and it seems that some have started to take profits in the past week.
According to the Santiment chart, the top 100 whale wallets in the Chainlink ecosystem have been selling off LINK tokens since the price crossed $18 on February 3. Between February 3 and the time of this press release, these whales have sold 6.9 million tokens, reducing their balances from 712.7 million to 705.8 million LINK.
Based on the 10-day Simple Moving Average (SMA) price of $18.9 per token, the recently sold 6.9 million LINK is worth $130.4 million. When whales sell off such a large volume in a short period, it puts the price rally at risk.
There are two main reasons why this high-volume sell-off could affect the price. Firstly, it dilutes the market supply, making it harder for prices to increase in the short term. Secondly, if the largest stakeholders in an ecosystem continue to sell off their tokens, it could create panic among retail investors and trigger bearish positions by copy-trading bots. These factors combined could lead to a short-term pullback in the Chainlink price.
Based on the analyzed on-chain data trends, Chainlink holders should expect a price downturn below the $20 support level if the whale sell-off continues in the coming days. However, given the buzz around asset tokenization and the bullish momentum from Bitcoin breaking above $50,000 on February 12, the LINK price could find strong support around $16.
The global in/out of the money chart from IntoTheBlock supports this outlook, showing that 63,270 addresses acquired 147.2 million LINK at an average price of $16.30.
If the critical support level of $16 fails to hold, the LINK price could experience a downturn below $15.
There is still a possibility of a rally towards $25, especially if the whales reduce their selling trend. However, in this scenario, bears could create a sell-wall around the $24 territory. In that territory, 74,160 addresses bought 34.1 million LINK at an average price of $24.3. If they decide to exit early, the LINK price could experience another pullback.
