Chainlink (LINK) faces increased selling pressure as whale activity surges, while interest in derivatives declines, altering the market dynamics.
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Whale netflows to exchanges surged 440% as sell pressure intensified.
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Retail and investor holdings rose, while whale dominance dropped.
A previously dormant whale recently deposited 200,355 Chainlink [LINK], valued at $3.27 million, into Binance after nine months of inactivity. This move secured the whale a $1.08 million profit from an earlier $4.56 million accumulation. The wallet still retained 145,430 LINK worth $2.37 million.
At the time of writing, LINK was trading at $15.39 following a 5.17% drop in the last 24 hours. While one sale does not define a trend, such high-volume activity often signals an early change in sentiment or price expectations.
As LINK experiences shifting demand dynamics, the ongoing sell pressure and whale movements could foreshadow a crucial tipping point for investors.
Most LINK holders are still in profit
Despite the whale’s recent sell-off, 75.57% of all LINK holders remain in profit according to IntoTheBlock’s Global In/Out of the Money data. Only 19.55% of addresses are currently holding LINK at a loss.
This strong profitability profile suggests that most market participants are yet to experience sell-side pressure.
However, with the current dip in price, further drawdowns could motivate more holders to realize gains, amplifying the potential for increased sell pressure.
Source: IntoTheBlock
Whales retreat as retail steps in
In the past 30 days, whale concentration declined by 0.97%, indicating a slight reduction in large holder dominance. Meanwhile, retail participation grew by 0.97%, and investor holdings rose by 0.59%.
This redistribution trend often suggests a transfer of assets from stronger to weaker hands.
The current dynamic may lead to more volatile price movements, as retail investors typically exhibit less holding conviction than whales or institutional holders.
Source: IntoTheBlock
The large holders’ netflow to exchange netflow ratio surged by 440.61% in the last seven days. This sharp increase in whale exchange deposits contrasts with the broader 30-day and 90-day trends, which remain negative.
However, the short-term spike signals growing sell-side pressure from large addresses. This shift could explain recent price weakness, especially if further deposits continue to surface in the coming days.
Source: IntoTheBlock
Bullish conviction weakens as derivatives interest declines
LINK’s derivatives volume has dropped 28.77% to $885.76 million, while Open Interest has fallen 5.75% to $668.17 million.
This decrease in speculative interest often reflects fading momentum or caution among leveraged traders.
Therefore, traders might be reducing exposure in anticipation of short-term volatility, especially as large holders move assets to exchanges and the spot market faces uncertainty.
As of the 17th of May, 89.41% of LINK traders on Binance held long positions, with a Long/Short Ratio of 8.44.
Although the dominance of longs remains high, the ratio has started to decline, indicating softening bullish conviction. While the sentiment is still skewed toward upside expectations, the slight drop in long dominance may hint at early caution among perpetual traders, possibly triggered by the recent whale activity and falling price.
Source: Coinglass
Is LINK entering a redistribution phase?
The combination of whale sell-offs, increasing exchange inflows, and weakening derivatives interest points to early signs of redistribution.
Although the majority of LINK holders are still in profit and long bias persists, a sustained increase in retail dominance and a drop in conviction from large players could open the door to short-term volatility.
Therefore, LINK may be transitioning from accumulation to a redistribution phase if current trends continue.
Conclusion
In summary, while substantial LINK holders currently enjoy profitability, the escalating sell pressure combined with an increase in retail participation suggests a critical inflection point. Investors should remain vigilant as market conditions continue to evolve, assessing their strategies amidst these changes.
