Earlier in December, Chainlink (LINK) saw significant market activity, resulting in an impressive 21% price increase within a single day. This surge was largely fueled by the World Financial Freedom Initiative (WLFI), a decentralized finance (DeFi) project backed by US President-elect Donald Trump, which invested $1 million in LINK tokens. The initiative specifically chose Chainlink to integrate its data sources as it prepared to launch its protocol on Aave v3.
However, in recent weeks, the market dynamics around LINK have changed significantly. Metrics in the chain reveal an increase in selling pressure from large investors. As the price of LINK approached the $30 threshold, these large holders seized the opportunity to secure profits, leading to a significant increase in transactions worth over $1 million. In late December, we reported that Chainlink whales, holding between 1 million and 10 million LINK tokens, had made significant acquisitions, amassing an impressive 3.58 million LINK tokens worth approximately $76.9 million in just three days.
This surge in whale transaction activity mirrors the patterns seen in the second half of 2021, indicating that major players are deciding to take profits after a failed price rally. An analysis of the liquidation heat map shows a consistent decline in LINK prices, especially during the last week, during which bearish sentiment dominated.
Although there are pockets of liquidity just below near-term support levels, the prevailing negative outlook has prevented a significant recovery. If this downtrend continues, the once strong $20 support level could face increased pressure, potentially leading to further declines as the market looks for liquidity.
LINK price forecast for 2025
Looking to the longer term, the outlook for LINK remains strongly optimistic. According to the price analysis from CoinCodexJanuary could signal the start of a bullish recovery for Chainlink. The maximum predicted price for LINK in January is $43.03, suggesting a potential return on investment (ROI) of 91%. CoinCodex’s projections are even more ambitious, predicting a 160% increase by May 2025, with LINK potentially reaching $59.
Top cryptocurrency analyst But Martinez noted that Chainlink appears to be forming a heads and shoulders pattern, a technical formation often associated with bearish reversals. If this pattern is confirmed, it could portend a dramatic decline in the price of LINK, with possible targets lower than $14 in the coming weeks. At press time, LINK is trading at $19.68 with a market cap of $12.63 billion and a 29.59% decline in trading volume..
While Chainlink experienced a temporary surge last month due to the impact of World Liberty, the current market sentiment has shifted towards profit-taking and selling among whales.
