Top crypto market analyst Ali Martinez has spotted a rare trend in the price performance of Chainlink (LINK), leaning on data from Santiment.
Taking to the X platform, Ali shared his observation, noting that the decentralized oracle protocol might soon witness a steep correction.
Chainlink and Historic MVRV Data Trends
The analyst pointed out that the Market Value to Realized Value (MVRV) trend of Chainlink suggests that a correction typically follows once this ratio exceeds 19%. Ali noted that this trend was captured on two occasions with similar responses from LINK.
Data from @santimentfeed shows that the last two times #Chainlink MVRV 30D surpassed 19%, $LINK underwent a steep correction!
Notice that #LINK MVRV 30D recently hit 20%, suggesting a brief correction before higher highs. pic.twitter.com/4zsKoYdupQ
— Ali (@ali_charts) October 2, 2023
The MVRV ratio is as an asset’s market capitalization divided by realized capitalization. In the case of LINK, the current market cap is pegged at $4,328,357,817 with the realized cap pegged at $8,447,387,997.
Riding on this data, Santiment shows the current MVRV ratio on the 30-day timeframe is now pegged at 20%. Should history repeat itself, Chainlink is expected to give up some of its recently accrued gains.
This bearish call is already manifesting according to LINK’s current price outlook. Data from CoinMarketCap shows that the token is trading at a price of $7.78 at the time of writing, down 3.27% over the last 24 hours. This slight slump in the price of LINK contrasts with the general market trend, further affirming the MVRV’s prediction.
While LINK is down, the general crypto market cap is up by 2.82% to $1.11 trillion. Generally, altcoins are showing short-term potential when their price performance outranks that of the broader market. With Chainlink showing opposing trends, trader’s expectations should now be backed with defined risk management.
Is Chainlink Witnessing a Temporary Price Defect?
Chainlink is one of the pioneering Oracle service providers in the industry and one of the most utilized protocols in Web3.0 today. Judging by the positivity surrounding the network as it concerns the rapid adoption of its solutions, we might be forced to assume the current downturn is temporary.
One of the notable trends in the Chainlink ecosystem is the rapid adoption and integration of the Cross-Chain Interoperability Protocol (CCIP). The CCIP seeks to take the blockchain interoperability agenda among protocols to a whole new level. As such, it is being adopted by top DeFi protocols across the board.
From the partnership with SWIFT to the growing accumulation of LINK by retail buyers, the fundamentals are evident. These can notably help boost the resilience of LINK in the mid to long-term despite the on-chain indicators.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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