Chainlink whales begin accumulation as LINK enters opportunity zone

Chainlink, the token of the decentralized blockchain oracle network, has likely hit the bottom in the current market cycle. LINK’s average trading returns have consistently declined, with 63.26% of holders sitting on unrealized losses. 

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Chainlink whales accumulate LINK while 63.5% holders sit on losses

Chainlink’s large wallet addresses holding between 10,000 to 100,000 and 100,000 to 1,000,000 LINK tokens have increased their holdings between May 8 and 17. The number of LINK whales holding between 10,000 to 100,000 Chainlink tokens climbed from 2,908 to 2,926 and the second segment of addresses that hold 100,000 to 1,000,000 added three new holders. 

Chainlink accumulation by large wallet addresses 

The accumulation of LINK tokens by whales in these two segments is bullish as it signals a rise in the number of large wallet addresses holding the altcoin. What’s more, accumulation by whales pulls LINK tokens out of circulation and reduces the selling pressure on the asset. 

Interestingly, whales are scooping up LINK at a time when 63.5% of LINK holders are sitting on unrealized losses. 

Based on data from crypto intelligence tracker IntoTheBlock, at $6.63, 63.26% of LINK token holders are sitting on unrealized losses. This metric signals that whales are likely “buying the dip.”

LINK token holders sitting on unrealized losses 

Chainlink enters opportunity zone 

The Market Value to Realized Value ratio (MVRV), a metric that calculates the ratio between the current price and the average price of every coin/token acquired, is used to identify the potential profits or losses if the asset was sold at the current price. This helps determine how over or undervalued the asset is. 

Chainlink’s 30-day MVRV is less than one, it is -5.355% at the current price ($6.60), indicating that most traders selling at the current price level would net a loss. 

Chainlink 30-day MVRV ratio 

The MVRV ratio suggests that Chainlink is in the opportunity “buy” zone since LINK is currently undervalued, with MVRV below one. Interestingly, the asset slipped into its opportunity zone with a high level of development activity on the protocol.

Chainlink development activity

A high volume of development activity is correlated with an increase in the project’s utility, adoption and price. However, the LINK price moved in the opposite direction, with the asset in the opportunity “buy” zone, making it likely that the altcoin has hit its cycle bottom and is ready for recovery.