Chainlink (LINK) is facing challenges as it struggles to regain momentum following a failed attempt to surpass the $26 resistance level at the end of January. This setback led to a decline, pushing LINK below the $20 threshold.
To recover effectively, Chainlink is now looking towards its investors to take the necessary steps.
Opportunity for Chainlink Investors
Presently, Chainlink's active addresses have dropped to a two-month low of 3,400, a level not seen since November 2024. This decline in active users indicates a diminishing interest among investors, with fewer individuals engaging in transactions on the platform. This hesitancy suggests that LINK holders are largely cautious.
The decrease in active addresses implies that many investors are adopting a cautious approach, likely due to recent struggles in price performance. This lack of active involvement could further impact Chainlink's price, as reduced transaction activity typically aligns with limited upward movement in the market.
Chainlink's broader momentum is also feeling the pressure, as evidenced by the Market Value to Realized Value (MVRV) ratio currently at -15%. This indicates that recent LINK buyers are experiencing an average loss of 15%. The MVRV ratio falling in the -8% to -19% range presents an opportunity for a potential reversal.
When the MVRV ratio dips into this range historically, it suggests investors are refraining from selling and opting to accumulate at lower prices instead. If this trend continues, it could signify a potential shift in Chainlink's price trajectory, as long-term holders might intervene to support and drive a price recovery.
Potential Rebound for LINK Price
Since the start of the month, Chainlink's price has declined by 25%, now trading at $18.84. Struggling to surpass the $19.23 resistance over the past week, it signifies a critical level that must be overcome for a potential recovery.
Accumulation of LINK at these reduced prices by investors could potentially flip the $19.23 resistance into support. This move might propel Chainlink towards the next hurdle at $22.03, providing the momentum required for further price appreciation.
Conversely, if the breach of $19.23 fails, Chainlink could break below its downtrend support line, reaching $17.31. A drop beneath this level would invalidate the current optimistic outlook, signaling a sustained bearish trend for LINK and potentially triggering further declines.