This week, Chainlink (LINK) price has shed its gains after the August 17 crypto market crash as the bears force another reversal below the $5.90 support territory. Amid the price slump, a vital on-chain indicator flashes green signals
Chainlink (LINK) price dipped below $5.80 on Monday, September 11. The price declined after whale investors failed to sustain the initial buying trend following successful tokenization tests in collaboration with Swift Network.
However, Chainlink has witnessed significant growth in new user acquisition this week. Will this outlier on-chain event cause the price downtrend to change course?
Chainlink Records 75% Spike in New User-Acquisition
Chainlink experienced a significant uptick in Network Growth this week, according to on-chain data compiled by Glassnode.
The chart below vividly indicates the 817 new LINK wallet addresses were created on September 11. This represents a 75% increase from the 467 addresses recorded on September 9. Notably, the last time the Chainlink network attracted this many new entrants was in mid-August, before the market crash on August 17.
Network Growth estimates the number of users joining a blockchain network by tracking new wallet addresses created daily. Typically, an uptick in user acquisition means that the underlying token is attracting fresh demand. When this happens during a price downtrend, the new demand could help the underlying native token change course.
Hence, if these new entrants join the existing Chainlink users to intensify the spate of viable transactions in the coming days, it could propel the LINK token of its current bearish trend.
Existing Participants Have Also Intensified Network Activity
Interestingly, the c trends also confirm that Chainlink will likely witness an increase in network traction in the coming days.
The Santiment chart below vividly illustrates that on September 11, LINK Daily Active Addresses crossed the 2,700 mark for the first time since August 18.
The Active Addresses metric tracks the participation rate of existing users on a blockchain network. It is derived by aggregating the number of unique wallet addresses carrying out transactions daily.
As observed above, albeit sporadic, Chainlink has recorded a persistent rise in network activity over the past three weeks.
This suggests that while whales’ buying pressure may have cooled, the Chainlink retail investors have swooped in to prevent terminal losses.
Notably, the chart also illustrates how recent LINK price movements have often coincided with changes in Active Addresses. If this trend holds, then Chainlink holders can anticipate some upside in the coming days.
LINK Price Prediction: $6.50 Remains the Obstacle to Beat
From an on-chain standpoint, the increase in network activity could give Chainlink bulls enough boost to reclaim $7 in the coming weeks.
This bullish stance is also validated by the Global In/Out of Money Around Price (GIOM) data, which depicts the purchase price distribution of current LINK holders. The $6.50 mark shows the largest cluster of Chainlink holders.
As shown below, 68,270 addresses currently hold 547 million LINK tokens bought at the average price of $6.50. If they begin to book profits, the Chainlink price rally could retrace.
But if the ongoing network activity boost generates enough momentum, LINK price could scale the $6.50 mark and face minimal resistance until it hits $10.
Conversely, if the negative sentiment in the altcoin markets prevails, the bears could force a major Chainlink price downswing below $5.
However, as shown below, 27,700 addresses had bought 25.6 million LINK tokens at a maximum price of $5.74. They could offer considerable support if they make last-ditch efforts to cover their positions.
But if that support level cannot hold, the LINK price could eventually drop below $5.
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