Chainlink (LINK) Surges 17%, Price Correction Looms
Chainlink (LINK) records 17% price increase in 24 hours – The reasons
Chainlink (LINK) has seen an impressive 17% price increase in the last 24 hours. But what is behind this development? Let’s take a look at the factors that have facilitated this rise.
Awakening of sleeping wallets
One of the main reasons for the increase was the activation of previously inactive LINK wallets. According to a report by Santiment on February 1, about 5.38 billion coins were activated in previously dormant wallets. This led to an increase in the so-called “Age Consumed” value, which indicates a short-term change in the behavior of long-term owners. Such changes in behavior often precede market lows and lead to a price increase.
Sell-off due to FUD
In addition to the activated wallets, on-chain data showed that some addresses have liquidated their LINK holdings. This suggests a certain degree of Fear, Uncertainty, and Doubt (FUD). But FUD is not always negative. In this case, it seems that it is this uncertainty that has boosted the price of Chainlink.
Outlook: Price correction possible
Despite the strong increase, a price correction may be imminent. The Network Value to Transactions (NVT) signal value of Chainlink has risen to 40.75. This value is used to detect whether investors are buying at a premium price or not. A high NVT signal value could indicate that the market has reached a local high and a price correction is imminent. If this is the case, the LINK price could fall below $18.
An analysis of the LINK/USD 4-hour chart shows that the price may be overbought. This suggests that a price correction could be imminent. The Relative Strength Index (RSI) confirms this assumption, as its value is at 77.01. An RSI value over 70 suggests that a token is overbought and a price correction could be imminent.
Despite the impressive price increase of Chainlink in the last 24 hours, the signs could point to an imminent price correction. Nevertheless, Chainlink remains an exciting cryptocurrency that we will continue to monitor closely.
Sources: Santiment, Glassnode, TradingView