Chainlink’s price action has been all over the place throughout the past few weeks, with it first seeing a bout of capitulation that sent it to lows within the $7.00, before it was able to post a strong rebound that led it up to highs of $11.20.
Unfortunately for LINK bulls, the cryptocurrency has not been able to stabilize above the $10.00 mark in the time following its rebound from $7.00. This points to some underlying weakness amongst the crypto’s buyers.
While speaking about where the market may trend next, one analytics firm explained that there are some signs of fundamental strength currently underpinning the cryptocurrency.
They specifically point to its MVRV metric, noting that this indicates that the crypto could be forming a short-term bottom that is followed by further upside.
In order for its technical situation to reflect this fundamental strength, it is imperative that the cryptocurrency surmount $10.00 once again and begins pushing up towards fresh post-capitulation highs.
Bitcoin may hold some influence over Chainlink and other altcoins, but it is currently caught within a tight bout of sideways trading that has offered little insights into its near-term outlook.
Chainlink Struggles to Gain Momentum as Altcoin Market Consolidates
At the time of writing, Chainlink’s price is trading up marginally at its current price of $9.25, struggling to garner any decisive momentum.
The cryptocurrency has been caught within a prolonged bout of sideways trading in the time following its drop to lows of $7.50 seen just a couple of weeks ago.
Analysts believe that the decline to these lows marked a fear-driven selloff that quickly led it into oversold territory, and it has yet to even come close to revisiting these lows.
Until it is able to gain a solid foothold above $10.00, however, its market structure may be plagued by some technical weakness.
Analytics Firm: LINK May Be Trading Within a Buy Zone
Santiment – a blockchain analytics firm specializing in on-chain data – explained in a recent tweet that Chainlink’s MVRV metric is showing that the cryptocurrency is entering a buy zone.
“Chainlink traders have been hurt more than most top 100 blockchain traders over the past 30 days, and our MVRV metric is indicating that a buy-low opportunity has arisen… LINK trader returns are at -20% in this time span. Sentiment is low, FUD is rampant, and a rebound is more likely than not under these conditions.”
Image Courtesy of Santiment.
Chainlink’s near-term trend may rely somewhat on that of Bitcoin, but its fundamental strength may be able to provide it with some independent momentum.
Featured image from Unsplash. Pricing data from TradingView.