Chainlink (LINK) is showing strong signs of recovery after a period of bearish movement. With a recent 11% price surge in just 24 hours, LINK is currently trading at $11.85 at press time. This upswing is not just due to market speculation but is also supported by a notable rise in outflows from exchanges and growing network activity. Could these factors fuel a continued rise for LINK, potentially leading it toward new highs ? Let’s take a closer look at what is driving Chainlink’s recent rally and whether the trend can sustain momentum in the coming weeks.

Rising Outflows Signal Lower Selling Pressure

One of the key factors contributing to Chainlink’s recent price rise is the decrease in selling activity. Data from CryptoQuant reveals that LINK has been experiencing steady outflows from exchanges over the past month, with a particularly notable surge on November 4th, when outflows reached a 30-day high.

This trend suggests that traders are less willing to sell their LINK tokens, which is a bullish signal. Outflows typically indicate that holders are moving their assets into private wallets, possibly in anticipation of price increases or to avoid selling in a down market. If selling pressure continues to ease, it could position LINK for further gains as fewer tokens are available for sale, which can drive the price higher.

Are Buyers Driving LINK’s Rally?

A closer look at Chainlink’s price chart reveals that buying pressure is increasing. The Relative Strength Index (RSI), which measures the strength of price momentum, has surged to a value of 71, signaling strong bullish momentum. The sharp upward movement of the RSI suggests that buying activity is behind the recent rally, pointing to rising confidence among traders.

Moreover, the Chaikin Money Flow (CMF) has turned positive, reaching a value of 0.17, which is another indicator of growing buying pressure. The CMF tracks the flow of money into and out of an asset, and when it’s positive, it indicates that more money is flowing into the asset than out, further confirming the uptrend.

If buying momentum persists, Chainlink could target its 1.618 Fibonacci level of $13.13 as the next key resistance level. The price chart also reveals a V-shaped recovery, a pattern that typically suggests strong upward movement following a sharp decline.

Rising Blockchain Activity Supports Chainlink’s Growth Potential

Another key factor fueling Chainlink’s recovery is the increasing activity on its blockchain. According to Santiment, Chainlink has recently emerged as the top Real World Asset (RWA) project in terms of development activity, with an impressive surge of over 14,000% in just 30 days. This rise in development activity is a sign that the network is growing stronger, attracting more developers, and fostering new use cases.

Additionally, active addresses on the Chainlink blockchain have seen a sharp increase. In just four days, the number of daily active addresses has risen from 1,930 to 2,750. An increase in active addresses typically signals growing engagement with the network, which is a bullish indicator for price growth. As more people use Chainlink for decentralized oracle services, the demand for LINK tokens could rise, helping to push prices higher.

Speculative Activity on the Rise: Open Interest and Funding Rates Surge

Speculative activity in the derivatives market is also picking up, further supporting the bullish outlook for Chainlink. Open Interest, which measures the total value of outstanding futures contracts, has surged to $203 million as of press time, indicating growing interest in LINK among derivative traders.

The increase in open interest has been accompanied by a rise in Funding Rates, which are now at their highest level for the month. Funding Rates reflect the cost of holding long or short positions, and when they rise, it indicates that more traders are taking long positions, betting on the price of LINK to continue rising.

These developments suggest that traders are increasingly confident in Chainlink’s price potential, further adding to the momentum driving LINK higher.

Could LINK Break Its Recent Price Range?

For Chainlink to break free from its current price range and make a significant move toward new highs, it needs to maintain the buying pressure and low selling activity observed in recent days. If LINK can hold above its current price level and push through the $13 resistance zone, it could open the door for further gains.

A strong breakout above $13 could signal that Chainlink is entering a new bullish phase, with the next target potentially being $15 or higher. However, if selling pressure increases or network activity declines, LINK could face a short-term pullback.

Chainlink Price Prediction: What’s Next?

Based on current trends, Chainlink appears to be on a promising path toward continued growth. The combination of rising outflows, increased buying pressure, and surging blockchain activity suggests that LINK could continue to climb in the short to medium term. If these trends persist, Chainlink could easily challenge resistance levels and potentially reach new highs.

However, as with any cryptocurrency, market conditions can shift quickly. While the outlook for LINK is positive, traders should remain cautious and stay updated on market developments to gauge whether these bullish trends continue.

Conclusion

Chainlink (LINK) is showing signs of recovery, driven by a combination of lower selling pressure, rising buying interest, and increasing blockchain activity. If these trends continue, LINK could target new price levels and move toward its next resistance zone at $13.13. Speculative interest in the derivatives market, along with the strong fundamentals of the Chainlink network, provides a solid foundation for further gains. As the market evolves, Chainlink’s prospects in 2024 remain positive, with the potential for significant upside if the current momentum continues.