Chainlink: Are early signs of a promising macro rally on the horizon?
- LINK showed multiple signs of the ongoing shift in favor of the long-term.
- LINK’s on-chain data suggested that the tide of accumulation was growing.
Chainlink [LINK] has been quite active lately in terms of developments that are aimed at elevating the state of WEB3. Its position in the industry as an oracle provider is one that makes its native token LINK appear quite attractive. But what does the future hold for LINK?
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LINK could be on the verge of starting its long-term bullish recovery. We must look at its long-term historic performance to fully understand why the Chainlink native token could be in the early stages of a long-term bull run.
If we zoom out on LINK’s price action for the last two years an interesting pattern could be noticed. The altcoin has been in an overall downward trajectory from the peak of the 2021 bull run. This observation has subsequently resulted in the formation of a descending support line.
However, LINK recently broke through the support line for the first time this year.
The Macro Downtrend is over
— Rekt Capital (@rektcapital) October 12, 2023
The above observation also occurred after an important observation regarding LINK came to light. LINK has been trading in a ranging performance since May 2022. This indicated that it may have hit its trend bottom. More importantly, it managed to achieve a new two-year low in May 2023.
Where there is smoke, there is fire
The above observation suggested that LINK has been stuck within the low range for a while and could finally pave the way for a long-term rally. However, the expected outcome requires various conditions for it to become a reality. The switch from short to long-term will require accumulation near the lower range so as to raise the price floor over longer durations.
If we zoom out on LINK’s supply distribution, we find that accumulation has indeed been taking place. Addresses holding between 1,000 and 10 million LINK tokens have been accumulating. This was evident by the growing supply held by those addresses in the last six months.
So why are bulls still struggling to gain the upper hand? Well, it turns out that addresses holding between 10 million and 100 million LINK tokens have been selling in the last six months. Thus, subduing the bulls by absorbing the incoming demand.
LINK enthusiasts should also note that its Mean Coin Age, at press time, stood at a six-month high after a steady upside. This signified that more LINK traders were choosing to HODL rather than sell for short-term profits. In other words, there is a growing focus on the long term.
It’s all for the long run
The Market Value to Realized Value (MVRV) ratio highlighted zones where the level of profitability rises and falls. The recent sell pressure resulted in a dip in this metric. However, the metrics revealed that the level of profitability was still higher compared to its six-month low in June.
How many are 1,10,100 LINKs worth today
The MVRV ratio revealed that those who purchased and HODLed since June were still deep in profit. Another sign that the shifting dynamic was in favor of the long-term. Despite this observation, the market was still stuck in a scenario where short-term profit-taking prevailed and helped to maintain a short-term focus.