Chainlink (LINK) Faces Potential Bullish Outlook Despite Market Downturn

Following a difficult week in the cryptocurrency market, Chainlink (LINK) managed to gain over 4% in 24 hours. This increase in price was supported by the accumulation of over 6.2 million LINK by whales, totaling approximately $76.88 million. Despite LINK losing nearly 10% over the week, the confidence of large holders in the asset remained evident.

Experts have pointed out several positive on-chain metrics that signal a potential 10% recovery in LINK’s price. One of the key observations is the reduction in the supply of LINK on exchanges, which has dropped by nearly 3% in the past two weeks. This decrease in supply typically eases selling pressure and paves the way for a price recovery.

The 30-day Market Value to Realized Value (MVRV) ratio for LINK is currently at -9.34%, a range historically associated with price reversals. A negative MVRV ratio suggests that the asset is undervalued, increasing the chances of a rebound as market sentiment shifts. Furthermore, the realized losses by traders totaling over $47 million from June 24 to July 8 indicate a trend of capitulation, often a precursor to a recovery.

Technical analysis for LINK also provides optimistic signals for a potential recovery. The $13.84 level aligns with the 23.6% Fibonacci retracement from the asset’s recent peak in March to the July low. Climbing back to this level could propel LINK towards a strong recovery. Additionally, LINK recently dipped into the Fair Value Gap (FGV) between $11.62 and $12.11, allowing for liquidity collection. The next target range for the asset is between $13.73 to $14.24, presenting an opportunity for further growth and price appreciation.

Despite the challenges faced by the cryptocurrency market, Chainlink (LINK) remains resilient with positive indicators pointing towards a potential bullish outlook. The accumulation by whales, positive on-chain metrics, historical patterns, and technical analysis all suggest that LINK may be on the path to recovery and further growth in the near future. Investors and traders alike may find opportunities in positioning themselves for potential gains in the LINK market.