Many examples from the past have shown us how quickly the crypto market can change. This volatility can cause a sudden increase or decrease in the price of an asset. Currently, there are specific factors regarding the price of Chainlink (LINK) that are attracting the attention of many analysts. These factors lead them to predict that LINK‘s price could potentially reach the $20 level again in the near future.
Factors That Could Affect LINK’s Price
Firstly, it is important to focus on the Exchange Net Position Change, a factor affecting LINK’s price. According to the latest data, on March 20th, LINK’s Exchange Net Position Change was recorded at -5.85 million. This indicates that many tokens are being withdrawn from exchanges, which could positively affect LINK’s price. Currently, LINK is trading at $18.16, showing potential for an upward movement.
Exchange Net Position Change is considered an indicator of the token supply on exchanges. If the supply decreases, it could indicate a reduction in selling pressure. Consequently, an increase in LINK’s price is expected.
Chainlink Shows Signs of Recovery
However, the correction experienced by LINK was not unique to it alone. We observe that many cryptocurrencies have lost value due to the overall market downturn. This resulted in LINK experiencing a 14.39% drop last week. Nevertheless, if the number of tokens withdrawn from exchanges continues to decrease, we should not overlook the possibility of creating an environment where LINK‘s price could stabilize.
Moreover, it is necessary to mention that LINK is showing signs of recovery. In 2023, it was among the few altcoins that broke away from the market trend. However, with the recent trend, LINK seems to have a chance to repeat this movement. Analysts say that by looking at the liquidation levels, they can assess LINK’s potential.
Pay Attention to Liquidation Levels
Liquidation levels are the estimated price levels at which potential liquidation events can occur. These levels can arise due to insufficient margin balance causing traders to forcibly close their positions, or due to high volatility in the market. Therefore, analyzing the indicators at LINK’s liquidation levels can be an important tool for understanding the future direction of price movements.
According to our analyses, if LINK reaches the $18.20 level, the risk of liquidation is quite high. In line with our expectations, we observe that potential losses could particularly come from short positions.
In addition to these assessments, when considering the Cumulative Liquidation Levels Delta (CLLD), we currently see that CLLD is increasing in a negative direction. This indicates that short positions could be pressured and even fail.
However, this situation is not only fraught with risks but also offers opportunities. Some analysts suggest that the recent drop is a buying opportunity for LINK. One such analyst, Michael van de Poppe, emphasizes LINK’s long-term potential, stating that buying at current levels could be profitable.
