Chainlink Price Flashes Buy Signal as 18M LINK Leaves Exchanges

Chainlink (LINK) has flashed a buy signal as traders rapidly withdraw their tokens from exchanges, signalling that the token could be in an accumulation phase. Chainlink price trades at $13.22 with a slight 0.3% drop in 24 hours. Will the ongoing exchange outflow be the key driver for the next LINK rally, or will buyers have to wait longer before a breakout?

Chainlink Price Flashes Buy Signal Amid Exchange Outflows

Chainlink has recorded a notable spike in exchange outflows in the last five days, a sign that traders could be in an accumulation phase. This is typically a buy signal that may precede a supply squeeze if the trend continues while demand gradually rises.

According to IntoTheBlock data, LINK’s exchange netflows have recorded a significant drop, indicating that the number of tokens leaving exchanges is notably higher than the number of tokens that are entering exchanges.

According to this data, LINK netflows to exchanges have dropped from 17.96 million in June 20 to -472,000 LINK, indicating that traders have taken more than 18 million tokens from exchanges. These tokens would be worth more than $230 million at the current LINK price.

Exchange outflows usually show confidence among traders that the Chainlink price may recover from the downward trend. Moreover, whales could be participating in the ongoing accumulation as large holder netflows also spike from -1.49 million LINK to 1.12 million LINK within three days.

Reversal Setup Signals 20% Rally

Besides the surging exchange outflows, the technical structure further suggests that $13 could be an ideal entry price for Chainlink token buyers. This is due to the formation of a rounding top bullish reversal setup that signals the trend is about to revert to a bullish one.

The rounding top pattern is on the verge of maturity as LINK tests the neckline resistance level at $13.07. Bulls will have to create a series of green candles above this resistance to confirm a bullish Chainlink price prediction that will see the price trend higher.

In case the breakout is confirmed, LINK price will likely surge by 20% from the breakout point to a multi-week high sitting at around $16.
Meanwhile, the RSI is flashing a warning sign due to its sharp reversal to the downside. As long as this indicator can remain above 50 to confirm the bullish momentum, bullish narratives such as the Chainlink and Mastercard partnerships could continue to drive gains.

In summary, Chainlink price appears to be on the verge of a massive move to the upside after a massive volume of LINK tokens was moved from exchanges, indicating that traders are not keen on selling. Meanwhile, the formation of a rounding bottom signals that a 20% rally could emerge.