In the wake of a challenging week marked by negative news such as Mt. Gox’s update and the German government’s Bitcoin dump, the crypto market finally saw a brief relief. Chainlink (LINK) managed to gain over 4% within 24 hours, despite facing increased bearish pressure. Interestingly, whales in the market have been actively accumulating LINK, with over 6.2 million tokens added to their stash in the past week, totaling around $76.88 million at current prices.
Positive Indicators for Chainlink
Despite LINK losing almost 10% of its value during the week, there are several factors pointing towards a potential bullish trend for the cryptocurrency. On-chain metrics indicate a potential 10% price recovery, with the supply of LINK on exchanges dropping by almost 3% in the last two weeks. This decrease in available supply typically reduces selling pressure, paving the way for a potential price rebound.
Key Metrics and Technical Analysis
The 30-day Market Value to Realized Value (MVRV) ratio stands at -9.34%, a level historically associated with price reversals. A negative MVRV ratio often signifies undervaluation, increasing the likelihood of a market sentiment-driven rebound. Additionally, traders realized losses of over $47 million from June 24 to July 8, indicating capitulation that usually precedes a market recovery.
Technical analysis also provides a positive outlook for Chainlink, with the $13.84 level aligning with the 23.6% Fibonacci retracement from the asset’s recent peak in March to its July low. If LINK manages to surpass this level, a strong recovery could be on the horizon. Furthermore, LINK dipped into the Fair Value Gap (FGV) range between $11.62 and $12.11, accumulating liquidity and setting its sights on the target range of $13.73 to $14.24.
Despite the recent challenges faced by the crypto market, Chainlink’s resilience and the accumulation of tokens by whales signal confidence among large holders. With positive on-chain metrics, historical price reversal indicators, and optimistic technical analysis, Chainlink may be poised for a significant recovery in the near future.