The Chainlink price has bounced back over the past few weeks, mirroring the performance of other altcoins. The LINK token soared to a high of $16.72 on Friday morning, marking a 66% increase from its lowest point in April. This article conducts an on-chain and technical analysis to predict the next point to watch.
Chainlink Price On-Chain Analysis
On-chain analysis is a popular way of looking at what is happening behind the scenes and using that data to predict the future.
Data shows that the number of LINK holders has been in a strong uptrend as they bet on its role in the decentralized finance (DeFi) and real-world asset (RWA) tokenization growth continues. There are now 761,000 LINK holders, up from 730,000 on January 1.
However, there are signs that whales are dumping LINK, as their total supply has been in freefall over the past few months. This figure has moved from a high of 611 million in January to 570 million today, indicating that whales have dumped 41 million LINK tokens in the past few months.
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Another important on-chain metric is the Mean Dollar Invested Age (MDIA), which looks at the average of all coins weighted by their purchase price. The 365-day MDIA figure dropped from 127 in April to 115 today. A falling MDIA figure is a sign that the network is not doing well.
Chainlink is widely seen as one of the most blue-chip cryptocurrencies because of its role in the industry. It is the biggest oracle provider, helping decentralized exchanges and lending marketplaces provide accurate price feeds.
It is also a top player in the RWA industry through its Cross-Chain Interoperability Protocol (CCIP) product. CCIP helps different chains communicate with each other and has been embraced by some of the industry’s top companies.
Chainlink Price Technical Analysis
The daily chart shows that the LINK price has bounced back in the past few weeks as we predicted. It moved from a low of $10 to nearly $17 today. This rebound happened after it formed a falling wedge pattern, a popular bullish reversal sign.
The Chainlink price has formed an ascending channel and moved above the 50-day moving average. It is also approaching the 61.8% Fibonacci Retracement level.
Therefore, technical analysis suggests that the coin has more upside potential as long as it remains above the 50-day Exponential Moving Average (EMA). If the Chainlink price rises above the key resistance level at $18, more gains to $20 will be confirmed.
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