Chainlink price soared to a 40-day peak of $16.7 on May 18, bringing its monthly gains to 34.7%, with on-chain data suggesting increased whale activity amid recent positive US macro indices.
Chainlink Price Surges as Large Investors Move to Front-run Imminent Rate Cuts
Chainlink is a world-leading blockchain oracle platform that integrates real-time price feeds of offline assets into the crypto products.
Over the past year, Chainlink has secured high-profile partnerships with heavyweight tradfi institutions like SWIFT, consolidating its position as an industry leader providing critical pricing oracle infrastructure to facilitate Asset Tokenization and the proliferation of Real World Assets (RWA) traded on the blockchain.
In May 2024, the US Fed rate announced a third consecutive rate pause, while the US Labour of Bureau of Statistics also reported a 3.36% consumer inflation rate, which is cooler compared to 3.48% last month and 4.93% last year.
These latest macro indices have increased optimism among market analysts that the US Fed could follow the European Central Bank (ECB) which has showed early signals of cutting rates as early as June 2024.
Analysts anticipate that a fed rate cut in 2024, could lead to a boom in the crypto markets, particularly in nascent sectors like Asset Tokenization and Real-World Assets (RWA) where Chainlink has established technological dominance over the past year.
23 Whales Wallets Buy LINK Tokens in 2 Weeks
Unsurprisingly, on-chain data trends show crypto whales and large institutional investors have been swooping in to buy copious amounts of LINK tokens on the back of the potentially dovish macro indices reported in the US this month.
The Santiment chart below represents changes in the number of Chainlink wallets holding balances of at least 100,000 LINK (~$1.5 million). It provides real-time insights into the rate at which large institutional investors are joining (or exiting) a particular crypto ecosystem.
The chart above shows that Chainlink had 554 active whale wallets as of May 3 when US Fed announced a rate pause. Since then, whale activity on the Chainlink network has been on a steady rise.
Following the latest dovish CPI data released on May 13, the number of Chainlink whale wallets has now skyrocketed to 567 at the time of writing on May 17.
This essentially implies that 23 more whale wallets have been active on the Chainlink network in the last two weeks, with each of them purchasing at least $1.5 million worth of LINK tokens.
When there’s a significant spike number of whale investors on a blockchain network as observed on Chainlink this week, strategic investors may view it as a major bullish signal for two main reasons.
First, the increase in whale activity often indicates growing confidence among large investors about the asset’s future prospects. Whales are typically well-informed and have access to sophisticated analysis tools, so their actions can serve as a strong indicator of positive future performance.
Second, the accumulation of large amounts of LINK tokens by new whale wallets can create a supply squeeze, leading to upward pressure on the price. As whales often hold out for longer-term investment targets, the reduced supply available in the open market can drive prices higher.
More so, the timing of this surge in Chainlink whale activity suggests that large investors are making strategic moves to front-run potential gains from an imminent US Fed rate cut.
Chainlink Price Forecast: Bulls Target $20 Retest after $2.3B Surge in LINK Market Cap
Chainlink price is hovering around the $16.40 mark at the time of writing on May 18, having added over $2.3 billion to its market capitalization since the US CPI data release. The rising whale activity, following dovish economic signals, suggests that LINK price may be poised for another upswing toward $20 in the days ahead.
Looking at the key technical indicators, LINK price has now broken above a critical resistance at $15.97 highlighted by the upper-limit Bollinger band. This alignment suggests bulls are now firmly in control of the short-term Chainlink market momentum.
If more whales join in on the buying frenzy, Chainlink price will likely breakout above $20 as predicted. But in the event of a correction phase, LINK bull traders must defend the $14.12 support price level to avoid losing the upward momentum.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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