Chainlink: With whale activity on the rise, here’s how to trade LINK
As investors remain cautious in the crypto market, DeFi platform Chainlink has traded well at record levels in 2022. Following a further plunge on Thursday, LINK dropped another 5% on Friday morning, hovering below $6.5 support. Despite the fact that downside concerns remained, timely whale buying might protect the market from more losses over the weekend.
Bears have wreaked havoc in the Chainlink market since it fell below a critical demand level of $13.5 in late April. Since then, the price has dropped by as much as 60%, and there was little reason to be positive from a technical standpoint. The candles were trading below their daily SMAs of 20, 50, and 200, with the RSI hovering around 35. As a result of these occurrences, LINK's downside risks were increasing by the day.
Whales, who hold over 60% of Chainlink's circulating supply, appeared to be oblivious to the dangers. LINK was among the most purchased tokens and most utilized smart contracts on the day, according to Whalestats statistics. The top Ethereum wallets spent an average of a little over $20,600 on their purchases.
Now, whale purchases might be irregular, and it's not necessarily essential for a low price to pique their interest. Even after a 9 percent daily fall, Shiba Inu, which is one of their greatest holdings among the top ETH whales, did not attract much attention from the whales. So, why were whales buying LINK tokens in the first place? One cause might be institutional adoption.
Adoption remains headstrong
The show continues 🎉
— Illuvium (@illuviumio) May 27, 2022
Join Illuvium x @chainlink for another special edition of Illuvitalks to discuss their contributions to the DeFi/GameFi ecosystem, our recent integration and more 😎
🎙 @TigerWillson + @chainlinkhttps://t.co/DAHIBJqqQV
Despite price drops, projects have continued to use Chainlink's price feeds, which are one of the ecosystem's most powerful weapons. Lluvium, a popular metaverse game, recently revealed plans to use Chainlink's services. Users will be able to appropriately price digital lands in the metaverse during sales and purchases thanks to the connection.
Leading global digital asset platform @ambergroup_io is now using #Chainlink Price Feeds to help power its suite of services, giving its growing institutional customer base access to high-quality, decentralized price data.
— Chainlink (@chainlink) May 25, 2022
➡️https://t.co/uzQqVPZ4Ro pic.twitter.com/EfI5tkO51u
Amber Group, a famous blockchain infrastructure platform, teamed up with Chainlink on Wednesday to provide financial market data to its digital asset services.
4-hour chainlink chart
Despite the fact that Chainlink's daily chart indicated more losses, whale buying might shift investor mood, particularly if a dead at rebound is detected over the weekend. As a result, rather than putting short bets, it would be more rational to wait for closing above an important level and then long LINK.
Traders might enter long calls around $7, just above the 4-hour 20-SMA (red), and exit at the high of $8 on 15 May. A $6 stop-loss can be used. The trading set had a risk-to-reward ratio of one.