- LINK showed several signs of a continued shift in favor of the long term.
- LINK’s on-chain data suggested that the tide of accumulation was growing.
Chain link [LINK] has been quite active lately in developments aimed at improving the status of WEB3. Its position in the industry as an oracle provider makes its native token LINK quite attractive. But what does the future hold for LINK?
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LINK could be about to begin its long-term bullish recovery. We need to look at its long-term historical performance to fully understand why the original Chainlink token could be in the early stages of a long-term bull run.
If we zoom out on LINK’s price action over the past two years, an interesting pattern might be noticed. The altcoin has been in a general downward trajectory since the peak of the 2021 bull run. This observation has subsequently resulted in the formation of a descending support line.
However, LINK recently broke through the support line for the first time this year.
The macro downtrend is over
Chainlink will now retest the Macro Downtrend to fully confirm its breakout#CLUTCH #Crypto #Chain link pic.twitter.com/dsrXp49AS2
— Rekt Capital (@rektcapital) October 12, 2023
The above observation also occurred after an important observation regarding LINK came to light. LINK has been trading in mixed performance since May 2022. This indicated that it may have reached its trend bottom. More importantly, the economy managed to hit a new two-year low in May 2023.
Where there’s smoke, there is fire
The above observation suggested that LINK has been stuck in the low range for a while and could finally pave the way for a long-term rally. However, the expected outcome requires several conditions before it can become reality. The switch from short to long term requires accumulation near the lower range to raise the price floor over longer maturities.
If we zoom out on LINK’s supply distribution, we see that accumulation has indeed occurred. There are more and more addresses with between 1,000 and 10 million LINK tokens. This was evident from the growing supply at these addresses in the past six months.
Source: Santiment
So why are bulls still struggling to gain the upper hand? Well, it turns out that addresses containing between 10 million and 100 million LINK tokens have been sold in the last six months. Thus, the bulls are suppressed by absorbing the incoming demand.
LINK enthusiasts should also note that the Mean Coin Age era was at a six-month high at the time of writing, after a steady rise. This meant that more LINK traders chose to HODL rather than sell for short-term gains. In other words: there is increasing attention for the long term.
Source: Santiment
It’s all for the long term
The market value to realized value (MVRV) ratio highlighted areas where the level of profitability rises and falls. Recent selling pressure resulted in a dip in this metric. However, the figures showed that profitability levels were still higher compared to a six-month low in June.
How much are 1,10,100 LINKs worth today?
The MVRV ratio showed that those who bought and HODLed since June were still making big profits. Another sign that the changing dynamics were in favor of the long term. Despite this observation, the market was still stuck in a scenario where short-term profit-taking prevailed and helped maintain short-term focus.