Chainlink (LINK) has recently experienced significant market downturns, reaching short- and long-term trend lows. This decline has made the altcoin notably cheaper. According to Santiment data, these price drops may present a buying opportunity.
Sentiments analysis is based on the Market Value to Realized Value (MVRV) metric, which assesses a token’s valuation:
– Negative MVRV Value: Indicates the token is undervalued and a potential buy.
– Positive MVRV Value: Suggests the token is overpriced and holders might sell for profit.
For LINK, the MVRV ratio has dropped by 11% every month and 18.7% every year, signaling that LINK is currently undervalued. This positions LINK as an attractive buy for both short-term and long-term investors.
LINK Price Analysis
At the start of 2024, LINK saw a rally of 87%, climbing from $12 to $22. However, these gains were wiped out in the second quarter, and subsequent recovery attempts also failed. As of the latest data, LINK is trading at $11.59, nearing its June low of $11.05.
The $11 level has consistently served as a key demand zone throughout the year. This support level aligns with Santiment’s thesis, suggesting that LINK is good for swing traders aiming for long positions. If market sentiment improves, LINK could target $14, offering a potential 30% return. Conversely, continued weak sentiment could push LINK below $10, exacerbating the market downturn.
Whale Activity in LINK
A notable whale cohort has been accumulating LINK at these lower price levels. Addresses holding between 1 million and 10 million LINK have been buying since late July, increasing their holdings in August. This group now controls 19% of the LINK supply.
However, the current sell pressure appears to be coming from addresses between 10,000 to 100,000 LINK and 100,000 to 1 million LINK. Together, these groups control about 20% of the LINK supply, almost equal to the cohort that is accumulating.
Conclusion: Monitoring Bitcoin’s Influence
The future movement of LINK could be significantly influenced by Bitcoin’s (BTC) next price direction. Investors should keep an eye on BTC’s trends, as they could determine whether LINK will rebound from the crucial $11 demand zone or continue to face downward pressure.
Overall, despite the current negative market sentiment, LINK’s undervaluation and whale accumulation suggest it could be a good buying opportunity for those willing to take a calculated risk.
