What Next for Chainlink (LINK) Price After Tokenization Tests With SWIFT ?

Chainlink (LINK) price has climbed above the $6 resistance level amid prevailing bearish headwinds in the altcoin markets. Recent changes in critical on-chain metrics suggest that Chainlink network participants are now angling for a bullish price reversal.

Swift network recently announced a successful tokenization test run in collaboration with Chainlink, CitiBank, and other global financial institutions. A few days later, LINK’s price broke above the $6 barrier on September 4 as the bullish whales pushed back against the prevailing bearish headwinds. 

On August 31, global payment processing platform SWIFT released results from transactional tests involving the use of Chailink infrastructure to facilitate the transfer of tokenized value across multiple public and private blockchains. The test involved CitiBank and a handful of other global financial institutions. 

On-chain data reveals that Chainlink whales have reacted positively to this recent development. According to the Santiment chart below, crypto whales with balances of 100,000 to 1 million LINK only held 188 million tokens as of August 30. But since SWIFT released the positive tokenization test results, the whales have accumulated another 2 million LINK tokens.  

Will Chainlink (LINK) Whales Trigger a Price Breakout | Whales Wallet Balances | Source: Santiment

The newly-acquired 2 million LINK is worth approximately $12 million at the current open market value of $6.07. Typically, increasing balances of whale wallets signal that large institutional investors are increasing their stake in the network.

The timing of this buying spree also suggests that Swift’s recent update has boosted the whales’ confidence that Chainlink could play a central role in facilitating a large-scale collaboration between DeFi and TradFi institutions.

If the whales continue to buy, the increased market liquidity could propel LINK price to new peaks in the coming weeks.

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Exchange Reserves Are Dropping Despite the Price Bounce

Despite the mild 4% price bounce between August 31 and September 4, Chainlink holders are not looking to book profits. In fact, on-chain data shows that LINK Exchange Reserves have been in steep decline  continued to move tokens out of exchanges

Between August 17 and September 4, Chainlink holders have now withdrawn 1.8 million LINK tokens.

Will Chainlink (LINK) Whales Trigger a Price Breakout | Exchange Reserves
Will Chainlink (LINK) Whales Trigger a Price Breakout | Exchange Reserves | Source: Glassnode

Exchange Reserves tracks real-time changes in the total LINK balances that investors currently hold in recognized crypto exchange wallets.

The current price of $6.07 means LINK market supply has dropped by approximately $12 million. The persistent decline in LINK Exchange Reserves suggests that Chainlink network participants are now angling for a bullish price reversal.  

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From an on-chain perspective, the LINK price looks set to reclaim the $10 territory if the bearish sentiment in the altcoin market subsides.

This bullish stance is also validated by the Global In/Out of Money Around Price data, which depicts the purchase price distribution of current Chainlink investors. It shows that if LINK’s price can scale the $6.50 mark, it would face minimal resistance on the road to $10. 

As shown below, 67,300 addresses bought 557 million LINK tokens at the average price of $6.50. If the strategic retail investors align their trades with the bullish whales, the Chainlink price rally could hit $10.

Chainlink (LINK) Price Prediction - IOMAP data. Sept 2023
Chainlink (LINK) Price Prediction – GIOM data. Sept 2023. Source: IntoTheBlock

Conversely, if the negative sentiment in the altcoin markets prevails, the bears could force a major downswing below $5.

However, as shown below, 33,300 addresses had bought 56.7 million LINK tokens at an average price of $4.95. They could offer considerable support by making last-ditch efforts to cover their positions.

But if that support level cannot hold, then the LINK price could eventually drop toward $4. 

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