- Dormant LINK tokens begin to change address.
- As investors turned to “buy the dip”, the market remained consolidated
The highest number of long-lasting Chainlink [LINK] tokens changed hands for the first time in six weeks on Aug. 10, data from Santiment revealed.
🔗 #Chain link is firing @santimentfeed alerts after the most dormant coin move in 6 weeks. Dive in $LINKThe average dollar invested age curve indicates that average coin times in portfolios are getting younger, a scenario associated with market cap growth. https://t.co/AMcvSGnxwy pic.twitter.com/Dya5Iu9HKx
— Santiment (@santimentfeed) August 11, 2023
On the on-chain data provider, the activity of dormant coins is tracked by the Age Consumed metric. This metric measures the number of tokens that have changed address in a given period multiplied by the time since they were last moved.
Read Chainlink’s [LINK] Price Forecast 2023-24
When this statistic peaks, it suggests that a large number of tokens that previously remained dormant have changed addresses, suggesting a change in long-term investor behavior.
This event is notable because holders of long-term assets rarely move their assets. Therefore, the revival of dormant coins often coincides with major shifts in market conditions and is often used to track a price bottom or top.
LINK tapped; fastest fingers rally to buy the dip
A sharp rise in LINK’s Age Consumed stat followed by a drop in price showed the altcoin reaching a local price high of $7.62. Although the value has been moving down since August 10, it is only down 3%.
Some investors have since turned to buying into the dip because of the slight price drop. A look at LINK’s Mean Dollar Invested Age (MDIA) showed a recurring flattening curve. This means that the average coin age in portfolios gets younger as newer investors buy LINK.
With newer investors rallying the altcoin in recent days, the bulls controlling the LINK market were spotted on a D1 chart. At press time, a glance at the token’s Directional Movement Index (DMI) showed the positive Directional Index (green) at 22.94, resting above the negative Directional Index (red). This meant that buying pressure was greater than distribution.
Similarly, the alt’s Relative Strength Index (RSI) was positioned above the midline at the time of writing. At 51.90, accumulation outweighed distribution at the time of going to press.
Source: LINK/USDT on trade view
As to whether this accumulation could lead to a price increase, a look at other momentum indicators suggested that the market remains in a state of consolidation. For example, in addition to the steady price of the past few days, LINK’s Money Flow Index (MFI) moved closer to oversold territory at 33.73.
Realistic or not, here is LINK’s market cap in terms of BTC
Similarly, the token’s Chaikin Money Flow returned a negative -0.02 at the time of writing, suggesting that the weakness in the LINK market persisted despite the accumulation.
Source: LINK/USDT in trade view
These indicators suggest that the LINK market may be in a state of consolidation and the price could break in either direction in the near term.
