Large shareholders of Chainlink (LINK) have curtailed the transfer of their assets to exchanges, correlating with a recent drop in the token’s price. Last month, LINK’s value plummeted by 21%, settling at $14.31 at the time of reporting. Despite this downturn, major holders have shown restraint in selling their holdings.
What’s Driving the Decrease in Activity?
The net flow from LINK whales to cryptocurrency exchanges has seen a sharp decline, dropping by 110% over the past 30 days. This trend indicates that these major players are transferring a minimal portion of their assets to exchanges. With a net flow rate of -0.06%, it’s clear that significant investors are opting to hold their positions rather than sell.
This metric, which measures the proportion of cryptocurrency moved from large holders to exchanges relative to total net flow, suggests a potential bullish signal. When the value is negative, it implies accumulation by large investors, possibly anticipating future price increases.
Why is the MVRV Ratio Important?
For those monitoring the market value/realized value (MVRV) ratio, the current scenario might present a buying opportunity. The MVRV ratios based on 30-day and 365-day averages stood at -3.7% and -1.0%, respectively. This negative value hints that the market price is lower than the average purchase price, indicating a discount and a potential buy signal.
Key Inferences for Investors
– The net flow rate and MVRV ratio suggest that large investors are holding rather than selling.
– Current negative MVRV ratios indicate LINK might be undervalued.
– Historical data implies potential future price increases if accumulation continues.
If these trends persist and investors capitalize on the current price dip, LINK could see its price rise to $15.17. Conversely, a continued decline might push it below $13. The three-day chart shows significant resistance at $19.25, which has led to substantial selling pressure. A close above the $15.48 EMA 20 average could provide the necessary momentum for a price increase.