Chainlink Price Prediction as LINK ETF and Strategic Reserves Jump

Chainlink price action mirrored that of other cryptocurrencies in the last two months as investors remained on the sidelines. The LINK token has remained in a narrow range between $8 and $10.1 during this period, despite rising ETF and reserve inflows.

Chainlink Price Wavered Despite Rising ETF Inflows

Third-party data shows that Chainlink ETFs experienced some modest inflows in March this year.

Grayscale’s GLNK ETF ended the month with over $73 million in assets, while Bitwise’s CLNK had over $15.4 million. The two attracted $10 million in inflows during the month, making this the first month without inflows since their inception.

While the $10 million inflow is modest for one of the biggest cryptocurrencies, it is an encouraging one compared to other cryptocurrencies.

For example, spot XRP ETFs shed over $31 million in assets in March, while Ethereum lost $46 million. Dogecoin ETFs added just $972k, while spot Hedera ETFs had just $2 million in inflows.

Most notably, the recently launched 21Shares Polkadot ETF (TDOT) has experienced just $544k in inflows.

As such, the modest Chainlink ETF inflows indicate some demand from American investors who believe in its mission as the most important infrastructure project in the crypto industry.

Chainlink Strategic Reserves Continued Growing

Meanwhile, Chainlink’s developers continued accumulating LINK tokens as part of the Strategic LINK Reserves, which it launched in August last year.

The team made four purchases of 494,132 coins, bringing the current reserves to 2.8 million tokens. At the current price, these reserves are worth over $25.2 million. These purchases will likely continue in the foreseeable future as the company uses on-chain and off-chain revenue to accumulate its tokens.

Data compiled by DeFi Llama shows that Chainlink’s monthly on-chain revenues remained steady in March, even as the crypto market consolidation and activity in the decentralized finance (DeFi) industry waned. It made 2,092 ETH coins in March, slightly lower than the previous month’s 2,230 ETH tokens.

The ongoing LINK ETF inflows and strategic reserves growth likely explain why the balances on exchanges has continued falling this year. CoinGlass data shows that there are 118 million tokens in exchanges, down from 157 million tokens in October last year.

Therefore, LINK’s price consolidated despite these bullish catalysts due to broader weakness in the crypto industry. The Bitcoin price has remained between $60,000 and $76,000 over the past two months. Other top coins like Solana, XRP, and Binance Coin have also consolidated.

LINK’s demand in the futures market has also waned in the past few months. Data shows that the futures open interest has dropped to $354 million, down from $1.9 billion a few months ago.

Open interest has been falling since the large liquidation event in October last year. Also, the weighted funding rate has remained in a narrow range in the past few months.

Chainlink Price Prediction: Technical Analysis

The three-day chart shows that LINK’s price has slumped over the past few months. It has slumped from $27.80 in August last year to $9.02 today.

A closer look shows it has formed a multi-year head-and-shoulders pattern, a common bearish reversal pattern in technical analysis. It has now moved below the neckline at $9.86, confirming the bearish outlook. The coin is slowly forming a bearish flag pattern and is now in the flag section.

Therefore, the most likely LINK price prediction is bearish, with the immediate target being the year-to-date low of $7.338.

A drop below that price will signal further downside, potentially to the key support level at $4.845, its lowest level in June 2023. This target is about 46% below the current level.