Chainlink Reserve Holds Over $18M LINK Amid Oversold Price Signal

Key Insights

• An analysis of Chainlink news revealed an oversold altcoin on the weekly price action chart.
• Chainlink Reserve crossed the 2.17 million LINK threshold, valued at over $18 million, after the addition of 136,898 tokens.
• Chainlink, XLM, Ondo Finance, and Avalanche dominated the top RWA projects with their institutional partnerships.

Chainlink (LINK) has remained the leader among oracle protocols in market capitalization and RWA deployed on the chain. Despite this, its price has crashed from $30 to now trading below $10 even as the crypto team makes huge steps toward tokenization.

The team has sped up supply tightening through their Chainlink Reserve, which could have a long-term impact on LINK. This clarified the rationale behind conducting a weekly analysis of the crypto.

Getting into the details of Chainlink news, the weekly chart showed that the price was pushing against a long-term downward trendline. The trendline had stalled about 3 rallies after the peak above $50 in 2021.

Recent lower highs from repeated rejections along the falling resistance indicated a weak overall structure.

In fact, LINK price had broken below $10, pronouncing the decline. Again, the Relative Strength Index (RSI) was at 28.15. This number was the lowest level ever, showing that the crypto was very oversold.

Usually, the markets tend to rebound from such conditions, especially when the prices get close to horizontal support between $6 and $8. However, more confirmations were needed to ascertain direction.

The current candles were just above the $6- $8 zone, suggesting demand was about to stabilize. Even so, being oversold did not mean a reversal would happen.

To confirm, the mid-range near $10 would have to be reclaimed. Then the descending trendline would have to be broken, hence confirming a long-term trend shift. Otherwise, there was a chance of losing money until then.

With price action still bearish both long-term and short-term, can a tightening supply reverse this?

The team has continued to help in shaping supply dynamics. Since starting their reserve, Chainlink’s circulating supply has continued to decline, now reduced by more than 0.30%.

As per Chainlink news on X, the Reserve added more than 136,898 LINK tokens, taking the total to 2.17 million LINK. The total holdings in the reserve were valued at slightly above $18 million per recent valuation.

Finer details showed that Chainlink Reserve accumulated 84,309 LINK in December and 87,829 LINK in January. February has seen more than 260K LINK tokens in total across two transactions.

Such consistent accumulation showed resilience and belief in the project. Apart from reducing circulating supply, this accumulation added confidence to those who were doubting the project.

Other market participants typically copy the activities of teams running crypto projects. This could mean that more buying was coming from both whalers and retailers.

Interestingly, the fundamentals were looking good for Chainlink. This was the case when assessing select RWA projects that stood out for bringing together TradFi’s stability and blockchain’s speed in ways that did not seem possible.

In fact, Chainlink was the leader in strong institutional integrations, working with big companies. Its goal was to enable secure data oracles. These entities were SWIFT, DTCC, J.P. Morgan, and Google Cloud, among others.

At the same time, Stellar (XLM) was dominating cross-border payments. It worked closely with PayPal, Mastercard, BlackRock, and the United Nations to make sending money easy.

Ondo Finance (ONDO), which focused on asset tokenization, had connections to BlackRock, JPMorgan, Morgan Stanley, and BNY Mellon.

Avalanche (AVAX) drove high-speed scalability by working with pretty similar entities to change the way businesses work. These partnerships showed that crypto was becoming more popular, especially on the RWA front, led by Chainlink.

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