Why Chainlink Price Kicked Off The Week With A Strong Rally?

Key Insights:

• Chainlink price surged 5%, aided by a strong dominance move.
• LINK just achieved its highest spot inflows on a year-to-date basis, according to Coinglass.
• Chainlink token volume soars to multi-month lows.

Chainlink’s native coin LINK price just kicked off the week with a strong bullish move. It surged by more than 5%, building on the same momentum that prevailed in the first half of August.

The bullish weekly start observed in LINK price action brought its August gains to 69% so far. This put the coin on track to be among the top-performing cryptocurrencies in August, especially if it can maintain that upside.

LINK’s latest upside demonstrated some interesting observations that may explain why it rallied. For example, its price action was also accompanied by a 12% spike in dominance. The latter surged as high as 0.45%, reaching levels last observed in late February.

The dominant spike confirmed that Chainlink was one of the coins experiencing heavy liquidity inflows amid the ongoing capital rotation.

LINK Records the Highest Daily Spot Inflows in 2025

LINK experienced its sharpest spot liquidity outflow on Thursday, during which net spot outflows surged as high as $41 million.

Interestingly, most of that liquidity flooded back into the coin on Sunday, during which net spot inflows almost clocked $28 million. This was the highest net daily spot inflows that LINK received in a single day in more than 10 months.

Things were even more interesting on the derivatives side, where volume soared above $5 billion. This was the highest observed level in the history of derivatives volume, but that was not all.

LINK also experienced record-high levels of open interest, which pushed as high as $1.75 billion. Token volume on the spot segment surged as high as $2.4 billion according to DeFiLlama.

These outcomes started occurring after it was revealed that Chainlink has been securing a robust position in the RWAs segment.

Also, the network just launched its Chainlink reserve program through which it will deploy an aggressive LINK buy-back program.

Rising institutional adoption, coupled with healthy demand from whales, arguably contributed significantly to LINK’s latest price action. But, despite this, there were still some risks to watch out for, even with the latest upside.

Chainlink Price Risks Liquidation Pressure, Here’s Why

Although LINK price’s latest rally was aided by a healthy injection of liquidity in the spot segment, derivatives demand was much higher. This underscored the probability of highly volatile moves, including liquidation events that may accompany the coin’s highly speculative nature.

Meanwhile, LINK price had soared past $25 during writing. This was unsurprising, especially amid a heavy pullback recorded in the broader crypto market.

Notably, the Chainlink price achieved a higher high while its RSI hit a lower high compared to its peak last week. LINK experienced a massive spike in long liquidations on Thursday last week, during which over $10 million worth of LINK was liquidated.

Besides, its surprise rally also triggered a shorts shakedown, which resulted in about $6 million in short liquidations.

The latest LINK price action underscored aggressive demand aided by some key fundamental developments.

Moreover, the market’s reaction confirmed that LINK was among the top coins that have found favor in the market as liquidity rotation starts to favor some altcoins.

But, despite this upside, LINK could find strong resistance near the $27 price tag. This is because the coin has been moving in a cup and handle pattern so far this year.

LINK approached the top part of the pattern courtesy of its latest upside. It was unclear whether demand would remain strong if price pushes above $27.