Chainlink: Can LINK’s ‘strong & oversold’ view help to stage a recovery
As Bitcoin [BTC] and Ether [ETH] fell by more than 8% and 6% respectively, in a day, investors’ emotions have understandably been in a state of flux. While most of the top 100 alts took severe hits on their prices as well, some felt the selling pressure more than others. According to Santiment, one such “strong and oversold” asset was Chainlink [LINK].
Suspected links to bears
At press time, LINK was the 26th biggest crypto by market cap, trading at $10.67. The crypto has lost 10.75% of its value in a day and plunged by 12.50% in the past week. However, volumes for the token were surging at press time. Historically, LINK volumes have dramatically increased following price drops, and it appears such a trend is taking shape once again.
Coming to the crypto exchanges, we can see that LINK supply on exchanges has been moving largely sideways, though there were slight outflows. This does back up the “strong” part of Santiment’s rating, as it shows that not a lot of panic selling has taken place – yet. However, bearish pressure has been constant through most of April.
Meanwhile, similar to what we observed with the LINK volume metric, it’s clear that LINK active addresses have a tendency of rising after price falls. While this took place after the latest dip, it’s clear that active addresses have been on the decline since the summer of 2021. Overall, this is not a healthy sign for the asset as it points to falling rates of adoption and investor interest.
Because you’re worth it?
TradingView’s Relative Strength Index [RSI] indicator for LINK revealed that the crypto was still in largely neutral territory, but moving closer towards becoming an oversold asset. If this comes to be, LINK might have a chance of reversing its fall and starting a new rally. However, for now, it looks like red candles are here to stay.