Chainlink price has crashed and is approaching a crucial support level amid anticipation of the upcoming Grayscale LINK ETF and plunging exchange supply. The token has plunged to a low of $12.25, down 56% from its year-to-date high.
Grayscale LINK ETF is Coming as Exchange Supply Plunges
Chainlink’s price remains in a bear market after losing almost half its value over the past few weeks. However, there are at least two near-term catalysts for the LINK price.
First, Grayscale will likely launch the first Chainlink ETF (GLINK) in the next few weeks. This was confirmed by Bloomberg analyst Eric Balchunas, who also noted that the company will launch its Dogecoin and XRP ETFs next week.
GLINK will be a conversion of the existing Grayscae Chainlink Trust, which has over $16 million in assets and a 2.50% fee, into an ETF. It will be the first ETF tracking the coin.
READ MORE: XRP Price Reaches Pivotal Support as ETFs Near a $500M Milestone
The fund will be released after Grayscale publishes a lengthy report outlining the case for Chainlink. In that report, Zach Pandl and Michael Zhao explained that Chainlink is one of the most important players in the crypto industry. They cited its role in connecting traditional and digital finance. The report said,
“Chainlink’s broad and likely increasing adoption, the token’s straightforward approach to value accrual, and its distinct features compared to other large crypto assets make LINK a compelling addition to diversified crypto portfolios.”
Another potential catalyst for the LINK price is falling exchange supply. Data compiled by Nansen shows that the supply has dived to 213 million, down from nearly 300 million in October, a 23% plunge.
Falling crypto supply in exchanges is a sign that investors are moving their tokens to self-custody, which is a good thing. It is also a sign that these investors are not selling their tokens.
Chainlink Price Has Formed a Risky Pattern
While Chainlink price has two bullish patterns, the weekly timeframe suggests that it may be on the cusp of a breakdown. It has formed the highly bearish head-and-shoulders pattern.
The chart shows that the head is at $30.86, while the left shoulder is at $22.7. Its right shoulder is at $27, while the neckline is shown in blue. This line has connected the lowest levels since October this year.
Therefore, moving below this trendline will confirm the bearish outlook and signal further downside, potentially to $10.
READ MORE: When Will Crypto Go Back Up?
