Chainlink (LINK) has continued to experience pressure amidst a prolonged downward trajectory in its price, exacerbated by global macroeconomic factors and various market challenges.

Following its peak at $22.8 in early March, LINK has undergone a substantial decline of around 42%, resulting in significant losses. Insights from IntoTheBlock indicate that only 44% of hodlers are currently enjoying profits from their LINK holdings, while a majority, accounting for 53%, find themselves in the red. Moreover, sentiment indicators underscore a prevailing bearish sentiment among investors, adding to the apprehension surrounding the cryptocurrency’s future performance.

However, despite the prevailing market pessimism, there are indications that LINK could be poised for a significant rebound. In a tweet on April 17, renowned crypto analyst Ali Martinez highlighted a promising trend: whenever Chainlink’s MVRV (Market Value to Realized Value) 30-Day Ratio has dropped below -12.24% since August 2022, it has signaled a prime buying opportunity, with an average return of 50%. 

“Currently, LINK MVRV 30-Day Ratio stands at -17.54%. This could be another chance to buy the LINK dip!” Martinez wrote.

The MVRV 30-Day Ratio compares Chainlink’s current market value to its realized value over the past 30 days, serving as a metric to gauge whether LINK is overvalued or undervalued.

Adding to the optimism, analyst UpsidedownCryptodata predicted a 92% chance of LINK seeing positive returns over the next six months. He further pointed out that LINK’s short-term risk is now reverting to a “historically high-value zone,” where the price has always rebounded.

“LINK’s short-term risk fell back to these levels numerous times last bull market, so seeing it do so here is not very surprising. Is this an opportunity once again?” he asked.

Elsewhere analyst “Coinskid” also shared a bullish perspective, likening LINK’s current correction to a macro wave 2 correction. Drawing parallels to Bitcoin’s historical price movements, the analyst revealed he anticipates a “bump n run” reversal, with a target price of $100.

That said, in addition to technical analysis, fundamental indicators have also been promising for LINK’s future trajectory. The recent launch of the Cross-Chain Interoperability Protocol (CCIP) is a pivotal development to tackle significant hurdles within the blockchain ecosystem.

This innovative protocol promises to revolutionize the industry by facilitating seamless connectivity between Layer 1 and Layer 2 blockchains without the necessity for fund transfers. It is set to cement Chainlink’s role in shaping the future of decentralized technologies.

At press time, LINK was trading at $13.26 after a 1.62% surge over the past 24 hours. As per data from IntotheBlock, should the price drop lower, it could find strong support between $10 and $12, where approximately 42,000 addresses recently acquired roughly 60 million LINK tokens worth about $800 million.

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Filed under: Bitcoin - @ April 17, 2024 3:22 pm