- LINK held on to $6.64 despite a plethora of exchange inflows
- According to one analyst, accumulating LINK could be very profitable for long-term holders
Recently, many Chainlink [LINK] tokens have been transferred into exchange wallets, according to Ali Charts, a pseudonymous crypto-analyst on X (formerly Twitter). The analyst’s post claimed that the value of LINK that was sent to these exchanges was worth over $326 million.
— Ali (@ali_charts) September 17, 2023
Typically, a hike in exchange inflows implies possible sell-offs by participants. Interestingly, AMBCrypto reported likely selling pressure for LINK since more tokens were released into circulation.
Read Chainlink’s [LINK] Price Prediction 2023-2024
LINK is now the market’s darling
However, the token has been able to stand the test of a decline, gaining by 10.37% in the last seven days. Over the last 24 hours, LINK has been able to hold strong to the $6.60-region. Furthermore, the rise in exchange inflows laid the grounds for Chainlink’s spike in network activity on 15 September.
A hike in on-chain activity like this suggests an increasing user base, utility of the token, and a potential hike in the value of the asset. But, what does the market think of LINK at its press time value?
To evaluate this perception, the weighted sentiment comes into play. As per the chart shared below, LINK’s weighted sentiment has jumped into the positive zone since 19 August. Usually, this metric spikes when the social volume of an asset is really high and most of the messages around it are positive.
Conversely, a negative weighted sentiment means that a large part of the market is discouraged about the price action of an asset. Thus, LINK’s weighted sentiment at 0.219 implies that many market participants are optimistic about the short-term price action.
This optimism was also reinforced by social dominance which rose to 0.931%. As a measure of the discussions in the market compared with other cryptocurrencies, the hike in social dominance means LINK has a considerable level of hype.
An opportunity of a lifetime?
Moments after Ali’s post, analyst Michaël van de Poppe opined that LINK at $6.60 is an “opportunity of a lifetime.” Poppe, who has been a staunch advocate of the Chainlink project, mentioned that the retest of the $6-level means market participants have a chance to accumulate before the token goes parabolic.
#Chainlink is moving up to $6.60 after an amazing retest of the range low at $6.
It’s still an opportunity of a lifetime.
— Michaël van de Poppe (@CryptoMichNL) September 18, 2023
Perhaps, it could be necessary to check how valid Poppe’s opinion is using on-chain data. One metric to help evaluate this is the Network Value to Transaction (NVT) signal. Created by Willy Woo in 2018, the NVT signal uses the 90-day Moving Average (MA), alongside the daily transaction volume, to identify when a cryptocurrency is expensive or cheap.
An NVT signal over 150 means the asset is overbought and possibly overvalued. But when it’s 45 or below, it means the asset in question is oversold and largely undervalued. Values between 45 and 150 could be termed as fair values.
At press time, Chainlink’s NVT signal was 48.82, meaning the token is now at a fair value if not undervalued.
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Therefore, the conclusion arrived at from the metric analyzed above means that those who buy LINK at the $6-region may have cause to celebrate in the future. However, there is a possibility that the token may fall from its press time price before any major uptick.