Chainlink‘s recent price surge appears to be wavering as major investors, known as whales, show signs that they might drive a downward correction soon. Despite reaching a 25-month high by overcoming the $21.69 resistance threshold, Chainlink’s value experienced a 5.66% decline, hinting at a possible correction with the current price hovering around $20.77. Whale investors have reportedly been offloading substantial amounts of LINK since early February, selling around 2 million LINK, which equates to an estimated $40 million. Their control over a significant portion of the circulating LINK supply, approximately 69%, allows them to exert a considerable impact on market prices.
Whale Movements Suggest Impending Price Adjustment
The pattern of whales selling during price highs, which often leads to market corrections, is considered a strong indicator of a potential trend reversal. Historically, such sales have been a predictor of future price drops, suggesting investors should brace for a possible decline.
Whales Dominate LINK Supply, Influence Market Movements
The distribution of LINK’s supply shows a heavy concentration in the hands of whales, leaving just 31% for smaller investors. Although a price dip is expected, the current sell-off does not match the rapidity or magnitude of past sales, which might result in a gradual correction rather than an abrupt plunge.
Technical Indicators Point to a Cooling Trend
Short-term analysis indicates that Chainlink’s bullish momentum is slowing down. The Moving Average Convergence Divergence (MACD) indicator, which measures the momentum and directionality of price movements, is showing bearish signs with red bars on its histogram. Additionally, the 50-day Exponential Moving Average is above the current candlestick price, signaling a potential drop to $20.12.
However, the 100-day EMA appears to be providing a safety net for LINK’s value. If Chainlink manages to hold above $20.12 with the support of individual investors, it could negate the bearish trend and push the cryptocurrency‘s value above the $21 mark.