Chainlink Supply Shock Builds as LINK Eyes Breakout Above $24.5

Chainlink is entering an explosive phase as exchange supply hits a multi-year low. The Chainlink Reserve initiative further strengthens its role as the “backbone” of the tokenized financial system.

Meanwhile, LINK must break through and hold the critical resistance range of $24.5 – $24.85 to ignite a powerful bullish wave.

Chainlink’s Supply Shock Happening

Over the past week, the Chainlink (LINK) network has recorded several significant developments, reflecting the rapid expansion of this Oracle ecosystem. Multiple services and blockchains, such as Arbitrum, Base, Ethereum, and Polygon, have integrated Chainlink standards.

Not stopping there, Bitwise has also filed an S-1 with the SEC for a Chainlink ETF, giving regulated access to LINK through a Delaware trust. The ETF tracks LINK’s price via the CME CF Chainlink–Dollar Reference Rate, with Coinbase Custody safeguarding the reserves.

Chainlink also partnered with the US Department of Commerce to bring on-chain macroeconomic data, such as GDP and the PCE Index.

“In the 1980s, Bloomberg terminals transformed how traders accessed information. Today, Chainlink is transforming how blockchains access government data. This is not a marginal upgrade; it is the foundation for how trillions in value will move securely in the tokenized economy,” one X user shared.

These positive developments have had a clear impact on LINK’s dynamics. The amount of LINK held on exchanges has dropped to its lowest level in years. Combined with the continuously growing Chainlink Reserve, this could trigger a supply shock. With demand rising and supply becoming scarce, the setup for a significant price rally is in place.

Key Level for LINK

Many experts argue that LINK is the backbone of the new financial system. Global banks are beginning to adopt it, an ETF may soon be launched, and even the US government is engaging with it. According to some analysts, LINK is becoming the “coin of the cycle,” with every central crypto narrative revolving around it.

From a technical perspective, LINK’s price is forming a tightening wedge pattern. Analysts suggest the $24.5 zone is a crucial breakout level; clearing and holding above it would confirm a bullish trend. Meanwhile, although LINK has surged 109% over the past year, current momentum shows signs of exhaustion.

Still, LINK’s most recent monthly candle closed strongly bullish. September is expected to be an upward phase, with a breakout above $24.85 potentially extending the rally further.

At the time of writing, LINK is trading at $23.70, up 3.1% in the last 1 hour, down 55% from its May 2021 ATH.