Chainlink Price Forecast as Millions of LINK Token Flee Exchanges

Chainlink price is stuck in a bear market after plunging by 42% from its highest level in August this year. This crash has coincided with the broader weakness in the crypto market. So, will the ongoing centralized exchange outflows spark a LINK price surge in the near term?

Millions of Chainlink Tokens are Exiting Exchanges

There are signs that crypto investors are moving their Chainlink tokens from exchanges to their self-custody wallets. In most cases, this happens when these investors anticipate the prices to bounce back.

According to Ali Martinez, a popular crypto analyst, 63 million tokens currently worth over $1 billion have moved from exchanges to self-custody wallets.

More data compiled by Nansen shows that there are now 222 million LINK tokens in exchanges, a figure that has remained in a freefall in the past few months. There were 287 million tokens in exchanges on October 10 this year, meaning that the supply has dropped by 22% in this period.

One reason for the ongoing crash in exchange reserves has coincided with the accumulation by top 100 addresses. These investors have boosted their holdings by 13% in the last 30 days to over 638 million tokens.

Chainlink Has Solid Fundamentals

The ongoing accumulation is a sign that investors anticipate that the Chainlink price will bounce back in the coming months because of its solid fundamentals.

One of the top fundamentals is that the amount of LINK tokens in the recently launched Strategic Chainlink Reserves has jumped from zero in August to 729,338 tokens today.

These tokens are worth about $11.8 million, a figure that will likely continue rising in the coming months as the network’s off-chain and on-chain fees rise.

Chainlink’s developers launched the strategic reserves as a unique way of creating demand and value for the coin. It was also a unique approach to other tokens, which have benefited from third-party companies that buy these tokens.

Potential LINK ETF Approvals

These investors likely expect the Chainlink price to benefit from the potential approval of a spot LINK ETF. Bitwise has filed for a LINK ETF with the Securities and Exchange Commission (SEC). At the same time, Grayscale has filed to convert its existing Chainlink trust into an ETF.

These ETF applications happened in August, meaning that the agency has more time to review them. However, there is a likelihood that these funds will not take a long time to approve them.

There are signs of robust demand for spot altcoin ETFs. For example, the recently launched Canary Hedera ETF has already had $71 million in inflows, while the Solana ETF has had over $342 million in inflows.

Chainlink, as the biggest player in the oracle industry, has the potential for more inflows from American investors.

Chainlink Price Technicals Point to More Pain Before Gains

A keener technical analysis suggests that Chainlink price will experience more pain before an eventual rebound. The coin has recently formed a death cross pattern, which happens when the 50-day and 200-day Exponential Moving Averages (EMA) cross each other when pointing downwards.

A death cross is one of the riskiest patterns in technical analysis. At the same time, the coin has now formed an inverse cup-and-handle pattern, which is made up of a support and a rounded top pattern. It normally leads to more downside.

In this case, the distance from the upper side of the cup to the support is about 45%. Measuring the same distance from the cup’s lower side gives the target at $8.425, which is about 46% below the current level.

A move below that level will be confirmed if it moves below the support at $10.10, its lowest level in April this year.

On the other hand, a move above the 200-day Exponential Moving Average at $18.55 will invalidate the bearish Chainlink price forecast. Such a move will point to more gains, potentially to the key resistance at $27.90.