- Chainlink price has declined by nearly 17% over the last five days to trade at $6.18 at the time of writing.
- LINK holders had been accumulating the token since mid-June but starting this month, they have predominantly been selling, albeit slowly.
- The altcoin is close to testing some key support levels but looking at the MVRV, the chances of a bounce back are likely since LINK is in the opportunity zone.
Chainlink price is bearing the brunt of the broader market bearish woes as the altcoin slipped to a monthly low this week. The investors have not been of much help either since they are looking to offset their losses. However, the helm of recovery sits in their hands.
Chainlink price decline continues
Chainlink price is currently down by 9% in the last 24 hours, trading at $6.18. While the largest stretch of this week’s decline was on August 17, the past few days have not been kind to the cryptocurrency either. In this week alone, LINK has contracted by nearly 17%, even reaching as low as 20% during the intra-day trading hours on Thursday.
LINK/USD 1-day chart
Two significant contributors to this decline have been Bitcoin price falling to $26,000 following the Elon Musk’s SpaceX BTC selling FUD and LINK holders selling since the beginning of August. In the past 17 days, over 1 million LINK worth a little over $6 million have been sold. While the volume is not significant, the sentiment is.
The sudden shift in investor behavior arrived after a month and a half of rigorous accumulation, during which LINK holders purchased over 16 million LINK starting mid-June.
Chainlink supply on exchanges
Thus the change in sentiment stems from the concern of protecting profits and offsetting losses. However, the low volume serves as reassurance that most investors are long-term holders supporting the network.
This might translate to recovery for the crypto asset going forward. The Market Value to Realized Value (MVRV) ratio, which measures the profit and losses of the investors, is sitting in the “opportunity zone”. This zone is synonymous with recoveries since investors are more likely to accumulate at low prices and refrain from selling at a loss.
Chainlink MVRV ratio
The Relative Strength Index (RSI) is also nearing the oversold zone at 30.0, and a decline below this mark would result in a potential recovery. As is, LINK bounced back after testing the support at $5.90 during the intra-day trading hours.
If recovery strikes, the altcoin could climb back above $6.38 and make back some of the recent losses. But if the altcoin declines further and loses the support at $5.90, it could crash further to $5.43.
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