Chainlink (LINK) price hit a new 2023 peak of $16 on November 9, before the bears force a pullback from last week’s euphoric highs. However, recent data trends in the chain show that Chainlink investors remain optimistic about a quick recovery.
Chainlink’s bulls have fiercely defended the $14 price support level this past week. Will LINK price recover or return?
Majority of Chainlink (LINK) Investors Continue
LINK price fell 13% to a daily low from weekly low of $14. Amid the neutral market sentiment, recent chain movements suggest that most LINK holders remain positive.
As depicted in the CryptoQuant chart below, Chainlink investors held a total of 149.9 million LINK tokens in wallets on offer. Interestingly, the figure has now dropped to 148 million LINK. Essentially, investors reduced their LINK exchange deposits by 1.4 million tokens this week, cooling concerns about a large-scale selloff.
The Exchange Reserves metric tracks real-time changes in the number of LINK tokens deposited into wallets offered on crypto exchanges and trading platforms. A sustained decline in foreign exchange reserves is considered a bullish indicator as it causes a decrease in spot market supply. At the current price of $14.20, the withdrawal of 1.43 million LINK tokens means a reduction of $20 million in LINK spot markets this week.
Read more: What is Chainlink (LINK)?
Furthermore, when investors opt for long-term cold storage during a price correction, it indicates that they are holding out for an early recovery, rather than exiting.
Despite falling prices, Chainlink continues to attract new users
Chainlink price has been in a downtrend since it bounced back from the yearly high of $16 last week. However, on-chain data trends show that this has not deterred new users and investors from entering the ecosystem. On November 9, Chainlink active addresses reached an annual high of 9,630 wallets. The chart below illustrates that it has consistently remained above 5,000 addresses since then.
The daily active addresses metric tracks the daily number of unique wallets that perform economic transactions. When a network records a consistently high number of active users, it often puts upward pressure on price. Not surprisingly, this has helped LINK price defend the $14 support over the past week.
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Finally, investors moving out of the market, and the steady pace of network usage, suggest that LINK is in an excellent position for a recovery if the broader market sentiment shifts.
LINK Price Forecast: Further Consolidation Ahead of $20 Rally
Inferring from the on-chain metrics analyzed above, Chainlink could return to $20, if the bulls can last through the ongoing consolidation phase.
The Global In/Out of the Money (GIOM) data, which groups the current LINK token holders according to their entry prices, also confirms this prediction.
This shows that the bulls have mounted a formidable wall of support around the $12 area. As depicted below, 52,840 holders bought 51.3 million LINK at the average price of $12.24. If that investor stands firm, they can trigger an immediate recovery as predicted.
But if the bears topple, that buying wall could drop LINK price to $10.
However, if Chainlink’s price scales $15, the bulls may regain control of the market. But in that case, the 55,130 holders who bought 35.5 million LINK at the minimum price of $15.19 could mount a resistance selling wall. But if that resistance gives way, Chainlink will likely rise to $20.
Read more: How to buy Chainlink (LINK) and everything you need to know
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