In recent weeks, Chainlink has demonstrated resilience as bulls fiercely defended the critical $8 support level. This defensive stance comes amid increasing interest in the altcoin, with its reserves swelling to 2 million tokens—approximately valued at $17 million. The demand for Chainlink has also been bolstered by positive Spot ETF inflows, reflecting a steady interest in the token.
Reports indicate that Chainlink continues to trade within a long-term symmetrical triangle pattern, a technical formation suggesting indecision in price movement. Interestingly, the weekly Relative Strength Index (RSI) for Chainlink has dipped to 32, marking a historic low. However, in the shorter timeframe, a bullish flag pattern has emerged, creating a potential for a short-term upward momentum that contrasts with the longer-term bearish sentiment.
Data from Glassnode highlights a noteworthy shift in the Holder Accumulation Ratio, a metric that gauges the proportion of active holders who are increasing their positions. This ratio fell to 66.06% toward the end of January but has since rebounded to 74.8%, a sharp rise after hovering in the lower range of 67%-69% for the majority of the past two years. Despite this increasing accumulation trend, the market has faced some selling pressure from short-term holders.
Further analysis from Santiment reveals that holders of Chainlink from the last three months are experiencing significant losses, as evidenced by a 90-day MVRV ratio of 24.29%. This suggests that recent buyers have suffered an average loss of 24%. In addition, the 90-day Mean Coin Age metric has seen a dramatic decrease, indicating selling activity among short-term holders.
Conversely, the activity among longer-term holders remains subdued, as demonstrated by stable patterns in the 180-day Dormant Circulation and a consistent uptrend in the Mean Coin Age. These metrics imply that long-term investors are either holding firm or cautiously increasing their positions, without displaying signs of a mass sell-off.
Despite signs of renewed accumulation, a cautious note has been sounded regarding the future of Chainlink. Experts contend that while there is potential for recovery, a definitive capitulation from long-term holders has yet to occur. This reality suggests that investors should remain vigilant, as another bearish wave could precede a lasting recovery.
In summary, while the recent uptick in the Chainlink accumulation ratio and the stable behavior of long-term holders holds promise, the looming risk of further declines remains a pressing concern for investors navigating the turbulent crypto landscape.
