Can Chainlink rally without retail? Mapping LINK’s next moves

Key Takeaways

Chainlink surged 12.32%, reaching $24.5 after successfully holding to $21 support. Whales purchased 938,489 tokens worth $21.23 million, driving the rally, but retail is absent.

Chainlink [LINK] surged 12.32% after successfully defending the $21 support, reaching a local high of $24.5.

As of this writing, Chainlink was trading at $24.3, marking an 11.2% jump on daily charts. Its trading volume surged 37.7% to $1.45 billion, indicating steady capital inflow. What’s driving the upsurge?

Chainlink whales are back 

After taking a step back from the market, Chainlink whales have returned. Spot Average Order Size data from CryptoQuant showed no whale orders between the 12th to the 17th of August. 

Source: CryptoQuant

Now, market behavior has shifted among whales, and they are accumulating, as reported by Onchain Lens. Five whale wallets spent 4,806 ETH tokens worth $21.23 million to purchase 938,489. 

When whales accumulate, it signals firm conviction with the market and anticipates the asset to gain further. 

Source: Coinalyze

In addition to these wallets, Chainlink’s spot market recorded substantial buying volume for two consecutive days. The altcoin saw 6.38 million in Buy Volume cumulatively, compared to 6.04 million in sell volume. 

Therefore, the altcoin buy-sell delta held within the positive zone for two consecutive days. Exchange flows echoed market behavior.

According to CoinGlass, Chainlink’s spot netflow dipped significantly, hitting a monthly low of—$935k. Such a dip suggests that exchanges recorded more outflows than inflows, a sign of aggressive accumulation. 

Source: CryptoQuant

Historically, increased accumulation supported by low exchange inflows has preceded higher prices as pressure on assets eases. 

Network activity flash warning signs 

Surprisingly, while Chainlink recorded significant buying pressure, network activity has failed to keep pace. According to Santiment, the altcoin’s Price DAA Divergence dipped into negative territory, hitting a low of -138.3%. 

Source: Santiment

Typically, when DAA Divergence drops to such low levels, it suggests that the price upswing is not backed by organic demand.

As such, fewer active users are engaged with the network, and thus, price strength isn’t confirmed by on-chain usage. 

The declining number of daily transactions further evidences this fact. There were 258.2k daily transactions at press time, a significant drop from the 4 million recorded a week ago. 

Source: Artemis

Typically, such a drop in network usage indicates the current rally is driven by whales or speculative instead of real adoption. Although not bearish, it’s a major red flag that momentum may fade.

Can LINK’s uptrend sustain without retail?

According to AMBCrypto’s analysis, Chainlink rallied as whales returned to the market to accumulate it.

As a result, the altcoin flipped its short-term Moving Average MA9 after closing below for two consecutive days. Likewise, the Relative Strength Index (RSI) surged to 68, comfortably edging into bullish territory.

Source: TradingView

Often, such momentum confirms a strong upward bias and indicates its potential to continue. If whales can hold the market and continue accumulating, LINK’s uptrend will continue, reclaiming $24.7 and eyeing $26.4.

However, declining network usage is a cause for alarm, and low demand could cause prices to dip if whale and speculators’ momentum fades. In such a case, Chainlink will pull back to $21.