• Chainlink price bounced off a key support level after marking a five-month low.
  • LINK investors’ deposits on June 7 hit a seven-month high, touching the November 2022 levels.
  • Although selling is being observed at the moment, accumulation is still dominating the market, most likely by newly formed addresses.

Chainlink price, after following the broader market cues, is nearing a key support level that was last visited by the coin in January this year. This has discouraged LINK holders to the point where selling has become a preferred option. However, newer investors are countering this selling by accumulating, preventing a severe decline.

Chainlink price dips lower

Chainlink price, currently trading at $6, bounced off a critical support level that has remained unbroken for nearly five months now. The week-long 9% decline added to the already ongoing price fall, which was the result of bearishness in the market and macroeconomic condition plus the regulatory crackdown by SEC.

LINK/USD 1-day chart

LINK/USD 1-day chart

All of this combined pushed investors to the brink of losing their patience, and they did as they resorted to selling. This is visible in the active deposits of LINK tokens observed on-chain, which are presently at a seven-month high. 

Chainlink active deposits

Chainlink active deposits

This rise suggests that investors are moving their holdings into the exchange wallets, and with LINK changing addresses this quickly, as observed by the two-month high velocity, it is evident that selling was the holders’ preference.

However, for their bearishness exist a much bigger horde of bullish investors that are most likely attempting to cash in on the opportunity of low prices. The Oracle blockchain token is being collected by these new addresses, which also include the LINK sold by existing holders.

This is visible from the uptick in network growth. The metric is a measure of the sentiment investors have towards an asset and also measures the rate at which new addresses are added to the network. High network growth is usually a sign of the project gaining traction, which is good for the cryptocurrency.

Chainlink network growth

Chainlink network growth

In the case of Chainlink, it is also proven by the fact that the rise in network growth was followed by a decline in the supply of LINK on exchanges. This is a sign of potential accumulation by these addresses, which will prevent a sudden crash going forward.

Some bullishness is necessary for Chainlink price as the cryptocurrency is already experiencing a bearish crossover per the Moving Average Convergence Divergence (MACD) indicator. Furthermore, the Average Directional Index (ADX) is not too far from the threshold of 25.0, a crossing that generally gives strength to the active trend, which is a downtrend at the moment and must be avoided for now.

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