After a tough week exacerbated by Mt. Gox’s update and the German government’s Bitcoin dump, the crypto market saw a brief respite. Chainlink (LINK), for one, gained more than 4% over the 24 hours after dealing with heightened bearish pressure.
Backing this trend are certain whales who have ramped up their LINK stash.
LINK Whales Add $77M
According to popular crypto analyst Ali Martinez, whales have accumulated over 6.2 million LINK this past week, which is worth approximately $76.88 million in current price.
This ac c umulation suggests confidence among large holders despite the crypto asset losing nearly 10% over the week amidst a broader market downturn.
Several factors reinforce a potential bullish outlook for Chainlink. Another expert believes that the on-chain metrics signal a potential 10% recovery in its price.
One of the key observations is that the supply of LINK on exchanges has dropped nearly 3% in the past two weeks. This reduction in supply on trading platforms typically eases selling pressure, thereby setting the stage for a recovery.
Meanwhile, the 30-day Market Value to Realized Value (MVRV) ratio is at -9.34%. Historically, this ratio is considered a crucial zone for price reversals. A negative MVRV ratio often implies that the asset is undervalued, which increases the likelihood of a rebound as market sentiment shifts.
Another significant metric is the realized losses by traders, which amounted to over $47 million from June 24 to July 8. Interestingly, such a trend suggests capitulation, which often precedes a recovery.
Bullish Technical Signals For LINK
Technical analysis also provided optimistic signals for LINK. The $13.84 level which aligns with the 23.6% Fibonacci retracement from the asset’s recent peak in March to July low. If LINK manages to climb back to this level, it could see a strong recovery.
Moreover, LINK dipped into the Fair Value Gap (FGV) between $11.62 and $12.11, collecting liquidity. As such, the next target for the asset is between $13.73 to $14.24.
