Chainlink Price Prediction: A 25% rally is likely only when LINK holders continue doing this
- Chainlink price has been struggling to breach the critical resistance at $8.1 since November 2022.
- LINK holders have been heavily accumulating over the last four weeks, with nearly $91 million worth of tokens leaving the exchange wallets.
- LINK investors need to sustain these aspects of their behavior - presence on the network and confidence in the asset to initiate a recovery rally.
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Chainlink price is currently maintaining its presence above the critical support level, avoiding a breakdown thanks to its investors. But these investors need to stick with the current bullish narrative in order to ensure LINK does not end up like Dogecoin or other assets that failed to mark a new year-to-date high.
Chainlink price can be pulled up only when this happens
Chainlink price is trading at $7.6, rising above the immediate resistance level of $7.4, which now acts as the immediate support floor. Standing below the 2023 high of $8.0, LINK would need to find support from its investors in order to breach the critical resistance of $8.1 and initiate a recovery to a seven-month high of $9.3 to mark a 25% rally.
LINK/USD 1-day chart
This is possible if investors double down on their current behavior. The decreasing supply on exchanges highlights that investors have been heavily accumulating. In the span of just a month, the total LINK in exchange wallets has declined by 12 million LINK, which is currently valued at $91.2 million.
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Chainlink supply on exchange
This is a positive sign, but for the bullish narrative to play out, Chainlink holders need to keep from selling it back and book profits for now. The 30-day Market Value to Realized Value (MVRV) ratio is currently in the positive zone at 9.3%, and historically the indicator breaching into this zone suggests a price pullback on the way.
 [05.35.09, 01 Apr, 2023]-638159061657599700.png)
Chainlink MVRV ratio
This is because investors resort to selling their holdings to gain profits on their investments around this time. Going forward, LINK holders need to avoid this and hold on to their tokens to allow a sustainable recovery.
Secondly, investors’ presence on the network needs to improve as well. The increase in active addresses over the last few days should continue since, even at the moment, Chainlink only has 4,500 investors active against 616,690 addresses with a balance.
Chainlink active addresses
If these conditions, along with the positive broader market sentiment, are met, a potential rally to $9.3 might be possible. If this doesn’t happen and Chainlink price fails to breach $8.1 again and falls through the support at $7.4, the altcoin could go down to the critical support at $6.9. Losing this support would invalidate the bullish thesis and drag LINK down to March lows of $5.9
Author
Aaryamann Shrivastava
FXStreet
Aaryamann Shrivastava is a Cryptocurrency journalist and market analyst with over 1,000 articles under his name. Graduated with an Honours in Journalism, he has been part of the crypto industry for more than a year now.
