Chainlink Rally Faces Overheated Territory Ahead of $12 Resistance
Chainlink's recent price rally has been supported by two key demand sources: recurring buybacks and institutional purchases through Bitwise ETFs. The protocol purchased approximately $1.09 million worth of LINK tokens, reducing the available supply while maintaining a weekly spending level near $1 million.
The institutional activity added another significant demand source as Bitwise continued to purchase Chainlink tokens, with over 127,000 LINK acquired for about $1.36 million through Wintermute.
However, rising exchange inflows, likely driven by profit-taking from short-term traders, pose a challenge to the rally's durability. The net inflow of $4.83 million on August 21 exceeded Chainlink's latest weekly buyback in size, introducing supply pressure and testing the rally's strength.
The derivatives market also showed signs of cooling down during LINK's rapid price increase, with traders reducing activity by 30.65% to $788.53 million. Open Interest declined by 4.45% to $686.14 million, indicating a separation from leverage-driven expansions in the derivatives markets.