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Is Chainlink (LINK) on the Verge of a 40% Price Breakout?

3 mins
Updated by Ryan Boltman
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In Brief

  • Despite widespread altcoin market FUD, Chainlink (LINK) price has scored an 8% rebound on Wednesday, Aug 23. 
  • While the fundamental drivers behind the rally are still unclear, the resilience shown by the long-term investors recently appears to have played a vital role .
  • MVRV data shows majority of long-term investors are still holding double-digit losses.
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Chainlink (LINK) price scored an 8% rebound on Wednesday, August 23, despite the prevailing FUD in the altcoin markets. Will investors hold out for a price breakout to avoid booking double-digit losses? 

Against the run of play, Chainlink (LINK) price registered a rare 8% price increase on August 23. On-chain analysis examines if LINK is on the verge of a price breakout or if the bears could reverse the gains in the coming days. 

Long-Term Investors are Holding Firm

Recent landmark partnerships and network integration announced by the Chainlink team appear to have inspired confidence among long-term investors. Indicatively, after a noticeable blip last week, LINK Mean Coin Age dipped toward 35.70. But as of August 23, it has reached 40.3, representing a 13% increase. 

Will Chainlink (LINK) Price Breakout? | Mean Coin Age | Aug 2023
Will Chainlink (LINK) Price Breakout? | Mean Coin Age | Aug 2023, Source: Santiment

The Mean Coin Age data is a vital measure of the overall sentiment among long-term investors. It is derived by estimating the average number of days coins in circulation have spent in their current wallet addresses.  

An uptrend in Mean Coin Age indicates a positive disposition among the long-term investors on the Chainlink network. 

If they continue to HODL, the Chainlink (LINK) could enter a sustained price breakout. 

Current Prices are Still Unfavourable for Most Holders

Despite the sizeable 8% price gain on August 23, most LINK holders could book double-digit losses if they sell instantly. As depicted in the MVRV chart below, most crypto investors who bought LINK in the last 30-days hold 14% unrealized losses. 

Will Chainlink (LINK) Price Breakout? | MVRV data | Aug 2023
Will Chainlink (LINK) Price Breakout? | MVRV data | Aug 2023, Source: Santiment

The Market Value to Realized Value (MVRV) ratio analyses holders’ net financial position. The chart above depicts that most holders that acquired LINK in the last 30-days could lose huge if they sell early. 

Hence, LINK traders could hold out until the price breaks above $7 to avoid double-digit percentage losses. 

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Considering the abovementioned on-chain indicators, Chainlink bulls could push the ongoing price breakout toward $10. 

The In/Out of Money Around Price data depicts the purchase price distribution of current investors within the Chainlink ecosystem. It highlights that the LINK price will face initial resistance around $7.

As shown below, the 22,560 holders had bought 273.5 million LINK at the maximum price of $6.80. Chainlink’s price could enter a bearish reversal if they book early profits. 

But if the bulls can push past that resistance, the LINK price could break out toward $10. 

Chainlink (LINK) Price Prediction | IOMAP data, Aug 2023
Chainlink (LINK) Price Prediction | IOMAP data, Aug 2023, Source: IntoTheBlock

Still, the bears could invalidate the price breakout prediction if the LINK price drops below $6. 

Although 18,570 addresses had bought 240.4 million LINK at the average price of $6.25. The price breakout could continue if the Chainlink holders remain unwilling to sell as predicted.

But if that support level caves, the LINK price could drop to $5. 

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Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

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Ibrahim Ajibade
Ibrahim Ajibade Ademolawa is an experienced On-chain research analyst who began his career in Commercial Banking. He has worked with several Web3 startups and financial institutions —analyzing technical concepts and spectacular events that link the DeFi and TradFi worlds. He holds a Bachelors’ Degree in Economics and is currently pursuing an MSc. in Blockchain & Distributed Ledger Technologies.
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