Chainlink price hits support as exchange supply dives ahead of ETF launch

Chainlink price remained under pressure as it crashed for four consecutive weeks and hit a crucial support level. 

Summary

• Chainlink price has crashed to an important support level this week.
• Grayscale will likely launch the GLINK ETF next week. 
• LINK price has formed a head-and-shoulders pattern on the weekly chart.

Chainlink (LINK) token dropped to $12, its lowest level since June, and 55% from its highest point this year. 

The ongoing LINK price crash has happened despite its strong fundamentals. For example, Nansen data shows that the supply of LINK tokens in exchanges has dropped to 213 million from last month’s high of 300 million.

Falling exchange balances is often a bullish sign because it means that investors are not dumping their tokens. It also means that there is no panic selling among investors. 

LINK price has also dropped despite the rising amount of tokens in its strategic Chainlink Reserves. Data on its website shows that these reserves have jumped to 884,674, which is equivalent to $11 million. 

The most recent addition happened on November 20 when the company added 81,285 coins to the reserves. These reserves are coming from its on-chain and off-chain fees.

Meanwhile, there are rising hopes that Grayscale will launch the GLNK ETF next week. Eric Balchunas, the senior ETF analyst at Bloomberg, shared this opinion. Such a move will likely be bullish for the coin because of the expected demand from American investors. 

The Bitwise Chainlink ETF could also be incoming after it appeared on the Depository Trust & Clearing Corporation. 

Chainlink is also benefiting from the ongoing growth of the real-world asset tokenization industry. Data compiled by RWA shows that the total amount in the industry rose by 1.47% in the last 30 days to over $35.6 billion. Chainlink benefits from this growth because it is the biggest oracle in the industry.

Chainlink price technical analysis 

Technicals suggest that the LINK price could be at risk of more downside in the coming weeks. It has formed the risky head-and-shoulders pattern and is now hovering at the neckline. 

A move below the ascending neckline will confirm this pattern and point to more downside, potentially to the psychological point at $10. 

The bearish outlook is confirmed by the fact that the Relative Strength Index is pointing downwards and is yet to move to the oversold level of 30. Also, the coin remains below all moving averages and the Supertrend indicator.

The bearish Chainlink price forecast will become invalid if it jumps above the key resistance level at $17.83, its highest point on May 12 this year.