Chainlink's price is targeting an upward trend as 18 million $LINK tokens leave the exchange in five days. Is the 20% Rally Imminent?
Chainlink (LINK) has given a buy signal as traders quickly withdraw their tokens from exchanges, indicating that the token may be in the accumulation phase.
Chainlink is trading at $13.22 with a slight decrease of 0.3% in 24 hours. Will the ongoing exchange outflow be the key driver for the next LINK rally, or will buyers have to wait longer before the breakout?
Buy signal between chain link price flashes exchange outflow.
Chainlink has recorded a significant increase in exchange outflows over the past five days, which is a sign that traders are in the accumulation phase.
This is usually a buy signal that may precede a supply squeeze if the trend continues while demand gradually increases.
According to IntoTheBlock data, LINK's exchange net flows have recorded a significant decrease, indicating that the number of tokens leaving the exchange is greater than the number of tokens entering the exchange.
According to this data, $LINK net flow on exchanges has decreased from 17.96 million in June 20 to -472,000 LINK, indicating that traders have taken more than 18 million tokens from exchanges. These tokens would be worth more than $230 million at the current LINK price.
Exchange outflows generally reflect confidence among traders that the chainlink price may recover from a downward trend.
Additionally, the whales may have contributed to the ongoing rally as major holder net flows also increased from -1.49 million LINK to 1.12 million LINK within three days.
Reversal Setup Signals 20% Rally
Apart from the increasing exchange outflows, the technical structure further suggests that $13 could be an ideal entry price for Chainlink token buyers.
This is due to the formation of a rounding top bullish reversal setup which indicates that the trend is about to turn bullish.
The Rounding Top pattern is on the brink of maturity as LINK tests the neck resistance level at $13.07. Bulls would need to form a series of green candles above this resistance to confirm a bullish chain link price prediction that would lead the price trend higher.
If the breakout is confirmed, LINK's price will likely rise 20% from the breakout point to a multi-week high of around $16.
Meanwhile, the RSI is flashing a warning sign due to a sharp reversal to the downside. As long as the indicator can stay above 50 to confirm bullish momentum, bullish statements like the Chainlink and MasterCard partnership could propel gains.
In summary, the price of Chainlink is on the verge of a massive rally after exchanges have moved a large volume of $LINK tokens, indicating that traders are not willing to sell. Meanwhile, a round-down formation indicates that a 20% rally could emerge.
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