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Are Chainlink HODLers coming out of retirement?

2min Read

Moving old tokens may be a sign of impending selling pressure. How low will LINK drop?

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  • The 90-day Mean Coin Age spiked, indicating profit-taking from long-term holders.
  • LINK’s price might shrink to $17.55 in the short term.

AMBCrypto’s analysis of Santiment data showed that Chainlink [LINK] long-term holders might be moving a lot of their tokens. We arrived at this conclusion by looking at the 90-day Mean Coin Age (MCA).

As of the 3rd of February, the MCA fell to 13.55. But at press time, the metric had increased to 43.20.

Rapid changes occur with the MCA when HODLers decide to move their assets. When the MCA is low, it means participants have accumulated a lot of new tokens and are retiring them to cold wallets. A recent example of this happened between the 30th of January and the 2nd of February.

Chainlink's on-chain data showing its price and long-term sentiment

Source: Santiment

Loyal holders get their reward

Therefore, the recent jump in the metric suggests that many Chainlink holders have switched from self-custody. In most cases, the movement results in profit-taking. However, AMBCrypto does not find it surprising that some LINK faithful would take profits.

In the last 365 days, LINK’s price has climbed from $7 to over $21, meaning the token has done a 3x. For a lot of market players, that’s a performance impressive enough to make unrealized profits realized.

But a surge in the MCA poses a risk to LINK. If HODLers continue to liquidate some of their assets, the token might erase some of its recent gains.

Further, our analysis of the LINK/USD daily pair showed that the price attempted to hit $21. But it faced resistance at $20.85. Despite that, the token remained highly volatile, the Bollinger Bands (BB) showed. High volatility indicates massive price fluctuations.

Therefore, if the market condition becomes highly bearish, LINK might fall as low as $17.55. If bulls are unable to defend this area, then the value might drop back to $15.

But in a highly bullish situation, LINK might extend its rally. Should this be the case, the price might jump toward $30.

Chainlink price analysis on the daily chart

Source: TradingView

LINK targets the south

However, indications from the BB revealed that the Chainlink token was overbought. This was because the upper band of the indicator tapped LINK at $19.95.

The Money Flow Index (MFI) also confirmed this as the reading initially hit 84.60. At press time, the MFI was 55.98, indicating a decrease in capital inflow.

If liquidity going into LINK continues to decrease, then the price might trend downward. In addition, Chainlink’s volume had decreased to 503.58 million.


Realistic or not, here’s LINK’s market cap in BTC terms


The decrease here, suggests dwindling interest in the token. If the market continues to be less interested in buying LINK, a move below $17 might be possible.

On another end, the total number of LINK holders seemed to be increasing. At press time, Santiment showed that there are now 719,000 holders, suggesting that the token’s long-term potential remains a promising one.

Chainlink's decrease in volume and increase in holder count

Source: Santiment

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Victor Olanrewaju is a full-time journalist at AMBCrypto. Settled in Lagos, his fascination with blockchain technology and the cryptocurrency market arose out of his love of freedom and everything free. As a Nigerian, Victor understands the impact unfounded financial restrictions have on a population. He sees Bitcoin and cryptos as a way to circumvent these obstacles, as a tool for value creation despite all the setbacks. A graduate in Physics, Victor previously worked as a Senior Marketer at Melange Technologies. Before that, he dealt with crypto-marketers on a regular basis in his capacity as Copywriter at Ventrix Media. At AMBCrypto, Victor’s focus is on assessing the real effectiveness of both on-chain and off-chain developments on a project and its community sentiment.
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